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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
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Date of Report (Date of earliest event reported:) December 22, 1998
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Iridium LLC
Delaware 52-1984342
(State or other 0-22637-01 (I.R.S. Employer
jurisdiction of (Commission File Identification
organization) Number) Number)
1575 Eye Street, N.W., Washington, DC 20005
(202) 408-3800
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Iridium Operating LLC
Delaware 52-2066319
(State or other 0-22637-02 (I.R.S. Employer
jurisdiction of (Commission File Identification
organization) Number) Number)
1575 Eye Street, N.W., Washington, DC 20005
(202) 408-3800
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Iridium World Communications Ltd.
Bermuda 52-2025291
(State or other 0-22637 (I.R.S. Employer
jurisdiction of (Commission File Identification
organization) Number) Number)
Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda
(441) 295-5950
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Iridium Capital Corporation
Delaware 52-2048739
(State or other 333-31741-03 (I.R.S. Employer
jurisdiction of (Commission File Identification
organization) Number) Number)
1575 Eye Street, N.W., Washington, DC 20005
(202) 408-3800
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Iridium IP LLC
Delaware 52-2048736
(State or other 333-31741-01 (I.R.S. Employer
jurisdiction of (Commission File Identification
organization) Number) Number)
1575 Eye Street, N.W., Washington, DC 20005
(202) 408-3800
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Iridium Roaming LLC
Delaware 52-2048734
(State or other 333-31741-02 (I.R.S. Employer
jurisdiction of (Commission File Identification
organization) Number) Number)
1575 Eye Street, N.W., Washington, DC 20005
(202) 408-3800
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Iridium Facilities Corporation
Delaware 52-2083969
(State or other 33-44349-04 (I.R.S. Employer
jurisdiction of (Commission File Identification
organization) Number) Number)
1575 Eye Street, N.W., Washington, DC 20005
(202) 408-3800
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This current report on Form 8-K is filed jointly by Iridium LLC (the
"Parent"), Iridium Operating LLC ("Operating"), Iridium World Communications
Ltd. ("IWCL"), Iridium Capital Corporation ("Capital"), Iridium Roaming LLC
("Roaming"), Iridium IP LLC ("IP") and Iridium Facilities Corporation
("Facilities").
IWCL acts as a member of the Parent and has no other business.
Operating is a wholly owned subsidiary of the Parent. The business of Operating,
operating the Iridium system and offering Iridium services, constitutes
substantially all of the business of the Parent. Capital, Roaming, IP and
Facilities are wholly owned subsidiaries of Operating.
Item 5. Other Events
EXPECTED ACQUISITION OF CLAIRCOM COMMUNICATIONS GROUP, INC.
On December 22, 1998, the Parent and Iridium Aero Acquisition Sub,
Inc., a Delaware corporation and a wholly owned subsidiary of the Parent
("Iridium Aero"), entered into a Stock Purchase Agreement (the "Purchase
Agreement") pursuant to which Iridium Aero agreed to acquire all of the
outstanding capital stock (the "Claircom Shares") of Claircom Communications
Group, Inc., a Delaware corporation ("Claircom"), from ATG I, Inc., a Delaware
corporation and a wholly owned subsidiary of AT&T Wireless Services, Inc., and
Rogers Cantel Inc. See the press release of December 22, 1998 attached hereto as
Exhibit 1.
Iridium Aero agreed to acquire the Claircom Shares for an estimated
aggregate price of approximately $65 million, consisting of approximately $25.6
million in cash to be paid at closing and approximately $39.4 million of notes
of Claircom which will be guaranteed by the Parent and issued to the sellers of
the Claircom Shares immediately prior to closing. The aggregate purchase price
is subject to certain adjustments, including working capital adjustments and
adjustments for capital expenditures made for the benefit of Claircom prior to
the closing. The Claircom notes issued to the sellers of the Claircom Shares
will have a term of nine years and will pay interest at a rate of 8% per annum
but will not require any payments for the first two years following their
issuance - interest accrued during the first two-year period will be added to
the principal amount of the notes. The Claircom notes also will contain certain
restrictive covenants, including restrictions on dividends, and will be secured
by substantially all of the assets of Claircom and a pledge of the Claircom
Shares by Iridium Aero.
The consummation of the acquisition of the Claircom Shares is subject
to certain significant conditions, including regulatory approval. For a complete
understanding of the terms of the expected acquisition, including the conditions
to closing and the adjustments to the purchase price, see the Purchase
Agreement attached hereto as Exhibit 2.
ESTABLISHMENT OF NEW BANK CREDIT FACILITIES - ESTIMATED FUTURE FUNDING
REQUIREMENTS
In the fourth quarter of 1998, Operating began the transition from a
development stage company into an operating company and, as a result, the
characteristics of its funding requirements are changing. In their efforts to
secure financing for the commercial operation of the Iridium system and the
offering of Iridium services, the Parent and Operating recently entered into a
series of transactions, including the closing of three new bank facilities. The
following discussion provides an overview of those transactions and summarizes
the registrants' current expectations regarding the future funding requirements
of the Parent and Operating.
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New Bank Facilities and Credit Support Arrangements with Motorola
On December 23, 1998, Operating closed three new bank credit
facilities that provide for an aggregate of up to approximately $1.55 billion of
borrowings - (i) a senior secured credit facility in the amount of $800 million
due December 29, 2000 (the "Secured Bank Facility") and (ii) a $475 million
term credit facility due December 29, 2000 and a $275 million revolving credit
facility due December 31, 2001 (collectively, the "Guaranteed Bank
Facilities"). Operating used (i) approximately $683 million of the funds
available under these new bank facilities to repay its outstanding bank debt,
of which approximately $410 million was due to mature on December 31, 1998 and
(ii) approximately $370 million of such funds to make payments under its
various contracts with Motorola.
Borrowings under the Guaranteed Bank Facilities are guaranteed by
Motorola. In addition, Motorola has unconditionally agreed to guarantee up to
$300 million of borrowings under the Secured Bank Facility, if such guarantee is
required pursuant to the terms of the Secured Bank Facility. Motorola has agreed
to provide such guarantees and other credit support pursuant to a memorandum of
understanding among Motorola, the Parent and Operating (the "Motorola MOU").
The Parent and Operating have agreed to compensate Motorola with equity and
cash interest for providing such guarantees and other credit support pursuant
to an agreement regarding guarantee among Motorola, the Parent and Operating
(the "Motorola ARG").
The registrants announced the closing of the Secured Bank Facility
and the Guaranteed Bank Facilities on December 23, 1998. See the press release
attached as Exhibit 3.
A form of each of the Secured Bank Facility credit agreement (Exhibit
4), the Guaranteed Bank Facilities credit agreement (Exhibit 5), the Motorola
MOU (Exhibit 6) and the Motorola ARG (Exhibit 7) has been filed as an exhibit to
this report. For a complete understanding of the terms of these agreements, you
should read these exhibits.
Secured Bank Facility
As of December 30, 1998, Operating had drawn $500 million under the
$800 million Secured Bank Facility. Borrowings under the Secured Bank Facility
mature on December 29, 2000. The parties to the Secured Bank Facility are
Operating, Chase Securities Inc. and Barclays Bank PLC, as Global Lead Arrangers
and Joint Book Managers, The Chase Manhattan Bank, as Administrative Agent and
Collateral Agent, Barclays Bank PLC, as Documentation Agent, Merrill Lynch,
Pierce, Fenner & Smith Incorporated, as Syndication Agent, and a syndicate of
lenders. Opertating expects to draw an additional $300 million, the remaining
available amount under the Secured Bank Facility, by January 22, 1999.
Collateral. Operating's obligations under the Secured Bank Facility
are secured by pledges of and security interests in (i) substantially all of
Operating's assets, including the Iridium system, (ii) the Parent's equity
interest in Operating and (iii) the reserve capital call (the commitment of 17
of the Parent's strategic investors to purchase up to 18,206,550 Class 1
Membership Interests in the Parent ("Class 1 Interests") at a price of $13.33
per Class 1 Interest, representing an aggregate purchase price of up to
approximately $243 million).
Conditional Obligation to Provide Motorola Guarantee. Pursuant to the
Motorola MOU, Motorola has agreed to guarantee up to $300 million of borrowings
under the Secured Bank Facility under certain circumstances. Under the terms of
the Secured Bank Facility, Operating is required to have Motorola guarantee $300
million of borrowings under the Secured Bank Facility if either (i) a default
under the Secured Bank Facility occurs or (ii) Operating does not achieve
certain funding and revenue targets. These funding and revenue targets include,
without limitation, (A) that Operating (through the Parent and IWCL) raise at
least $150 million in proceeds from equity issuances and (B) that Operating have
cumulative accrued revenues (by the last day of the month indicated) of not less
than $25 million (February 1999), $45 million (March 1999), $75 million (April
1999), $115 million (May 1999), $200 million (June 1999), $300 million (July
1999) and $425 million (August 1999). The conditional
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obligations of Operating and Motorola with respect to the guarantee of $300
million of borrowings under the Secured Bank Facility terminate if Operating
either (i) raises (through the Parent and IWCL) at least $250 million in
proceeds from equity issuances prior to February 28, 1999 or (ii) raises
(through the Parent and IWCL) at least $150 million in proceeds from equity
issuances prior to February 28, 1999 and meets one of certain minimum monthly
revenue requirements and, in each case (i) and (ii), Operating certifies to the
lenders under the Secured Bank Facility that it believes it has committed or
available funding (including projected revenues) to meet its projected costs.
If Motorola is required to guarantee any borrowings under the Secured Bank
Facility, the Parent and Operating would be required to compensate Motorola
with equity in the form of warrants to purchase Class 1 Interests pursuant to
the Motorola ARG.
Covenants. The Secured Bank Facility contains various covenants of
Operating. One group of covenants requires Operating to satisfy certain minimum
revenue and subscriber levels with respect to Iridium services, including that
(i) at March 31, 1999 it have cumulative cash revenues of at least $4 million,
have cumulative accrued revenues of at least $30 million, have at least 27,000
Iridium World Satellite Service subscribers and have at least 52,000 total
subscribers; (ii) at June 30, 1999 it have cumulative cash revenues of at least
$50 million, have cumulative accrued revenues of at least $150 million, have at
least 88,000 Iridium World Satellite Service subscribers (which does include
customers that are exclusively roaming, paging or calling card customers) and
have at least 213,000 total subscribers; and (iii) at September 30, 1999 it
have cumulative cash revenues of at least $220 million, have cumulative accrued
revenues of at least $470 million, have at least 173,000 Iridium World
Satellite Service subscribers and have at least 454,000 total subscribers.
Other financial and operations related covenants in the Secured Bank Facility
require Operating to comply with certain financial ratios as of various dates,
including maximum debt to total invested capital, maximum secured debt to
earnings, maximum debt to earnings and minimum interest expense to earnings.
The Secured Bank Facility contains covenants related to, among other things,
the maintenance of minimum system performance, the maintenance of insurance,
the maintenance of regulatory authority to offer Iridium World Satellite
Service in a minimum number of countries and the permitted uses of revenues
from operations, borrowed funds and proceeds from the issuance of debt and
equity securities. The Secured Bank Facility also restricts Operating's ability
to incur additional indebtedness, make dividend and other payments and merge,
consolidate or sell certain of its assets. In addition, the Secured Bank
Facility requires mandatory prepayment in the event debt and equity issuances
or cash flows exceed certain thresholds.
Factors that Could Affect Ability to Comply with Indebtedness
Covenants. For Operating to comply with the financial and operations related
covenants in the Secured Bank Facility, the Guaranteed Bank Facilities and
Operating's other indebtedness, it will have to make a timely and successful
transition from a development stage company into an operating company and
generate substantial demand for its services. While the registrants believe that
Operating will be able to satisfy these covenants, various factors, including
those discussed in Exhibit 99 to the registrants' report on Form 10-Q for the
quarter ended September 30, 1998, could prevent Operating from satisfying these
covenants. If Operating is unable to satisfy the covenants in the Secured Bank
Facility, the lenders under the Secured Bank Facility generally would have the
right to declare a default and could pursue various remedies, including, without
limitation, enforcing their security interest in substantially all of the assets
of Operating (which include the Iridium system and represent substantially all
of Parent's assets) and the Parent's equity interest in Operating.
Events of Default. Events of default under the Secured Bank Facility
include, but are not limited to: (i) failure to pay interest, principal or other
amounts with respect to the Secured Bank Facility; (ii) impairment of material
provisions of specified agreements relating to the Iridium system or the
cessation of such provisions to be valid, binding and in full force and effect;
(iii) certain events of bankruptcy, insolvency, reorganization or liquidation
affecting the Parent, Operating, Motorola, certain of their subsidiaries or
certain other parties; (iv) a cross-default to other indebtedness of the Parent,
Operating, Motorola or certain of their respective subsidiaries in excess of
specified amounts; (v) final judgments with respect to Operating, Motorola or
certain of their respective subsidiaries in excess of specified amounts; (vi)
failure by Operating, Motorola, certain of their respective subsidiaries or
other project parties to obtain or maintain necessary telecommunications or
other regulatory approvals; (vii) breaches of covenants by the Parent,
Operating, its subsidiaries or Motorola; (viii) failure of any representation or
warranty made by the Parent, Operating, its subsidiaries, Motorola or any other
project
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party in connection with the Secured Bank Facility; (ix) failure of the
perfection of the liens granted by the Parent, Operating, its subsidiaries or
Motorola, as the case may be; (x) failure of the Parent to own all of the equity
interests in Operating; and (xi) breach by Motorola of specified agreements
relating to the Iridium system.
Interest. Borrowings under the Secured Bank Facility bear interest,
at the option of Operating, at the rate of either (i) the adjusted base rate
(generally, the higher of the Federal Funds Rate as established by the Federal
Reserve Bank of New York, plus 0.5%, or Chase's prime commercial lending rate)
plus 2.75% or (ii) an applicable LIBOR rate (which is based on a formula
relating to the London interbank offered rate for a given interest period) plus
4.0%.
Guaranteed Bank Facilities
The Guaranteed Bank Facilities consist of a $475 million term credit
facility that matures on December 29, 2000 and a $275 million revolving credit
facility that matures on December 31, 2001. The parties to each of the
Guaranteed Bank Facilities are Operating, Chase Securities Inc. and Barclays
Bank PLC, as Global Lead Arrangers and Joint Book Managers, The Chase Manhattan
Bank, as Administrative Agent, Barclays Bank PLC, as Documentation Agent and, in
the case of each facility, a different (but partially overlapping) syndicate
of lenders. As of December 30, 1998, Operating had drawn an aggregate of $510
million under these facilities ($470 million under the term facility and $40
million under the revolving facility) and Operating expects to draw an
additonal $115 million under the revolving facility on December 31, 1998.
Motorola Guarantee. Borrowings under the Guaranteed Bank Facilities
are guaranteed by Motorola. Pursuant to the Motorola ARG, the Parent and
Operating are required to compensate Motorola with equity (in the form of
warrants to purchase Class 1 Interests and, in certain cases, warrants to
purchase Class A Common Stock of IWCL ("Class A Common Stock")) and cash
interest for guaranteeing borrowings under the Guaranteed Bank Facilities.
Pursuant to the terms of the Guaranteed Bank Facilities, Iridium may have
access to no more than an aggregate of $745 million of borrowings in order to
ensure that the Motorola $750 million guarantee covers additional obligations
of Operating to the lenders under the facilities.
Covenants. The Guaranteed Bank Facilities contain covenants of
Operating related to, among other things, maintenance of insurance and
restrictions on the ability of Operating to incur additional indebtedness, make
dividend and other payments and merge, consolidate or sell certain of its
assets. The Guaranteed Bank Facility does not have covenants that are directly
tied to Operating's revenues or subscriber levels.
Events of Default. Events of default under the Guaranteed Bank
Facilities include, but are not limited to: (i) failure to pay interest,
principal or other amounts with respect to the Guaranteed Bank Facility, (ii)
certain events of bankruptcy, insolvency, reorganization of liquidation
affecting Operating, Motorola and certain of their respective subsidiaries,
(iii) cross default to other indebtedness of Operating, Motorola or certain of
their respective subsidiaries in excess of specified amounts, (iv) final
judgments with respect to Operating, Motorola or certain of their respective
subsidiaries in excess of certain amounts, (v) breaches of covenants by
Operating or Motorola and (vi) failure of any representation or warranty made
by Operating or Motorola in connection with the Guaranteed Bank Facility.
Interest. Borrowings under the Guaranteed Bank Facilities bear
interest, at the option of Operating, at the rate of either (i) the adjusted
base rate (generally, the higher of the Federal Funds Rate as established by the
Federal Reserve Bank of New York, plus 0.5 %, or Chase's prime commercial
lending rate) or (ii) an applicable LIBOR rate plus 0.75%.
Motorola MOU
In connection with the establishment of the Secured Bank Facility and
the Guaranteed Bank Facilities, Motorola, the Parent and Operating entered into
the Motorola MOU which generally relates to
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the credit support arrangements among Motorola, the Parent and Operating and
which amended and restated a previous memorandum of understanding among those
parties. Under the Motorola MOU, Motorola has agreed to, among other things, (i)
guarantee up to $750 million of obligations under the Guaranteed Bank
Facilities, (ii) consent to and agree to either (a) an amendment to the
Guaranteed Bank Facilities and the related guarantee agreement (or to entry into
a new bank credit facility and guarantee agreement with the same material terms
(other than pricing)) that together provide for a $350 million increase in the
Motorola guaranteed borrowings available thereunder or (b) a guarantee of up to
$300 million of borrowings under the Secured Bank Facility, if required, (with
the difference between the amount so guaranteed and $350 million continually
available for an increase in the Guaranteed Bank Facilities as described in
(a)), (iii) permit Operating to defer its obligations to pay up to an aggregate
of $400 million of payments under the Operations and Maintenance Contract for
the Iridium system (the "O&M Contract"), until December 29, 2000, (iv) guarantee
up to $400 million of additional borrowings under a bank credit facility with
terms (other than pricing) identical in all material respects to the Guaranteed
Bank Facilities on the condition that such additional guaranteed borrowings be
used exclusively to make payments to Motorola for deferred obligations under the
O&M Contract (as described in (iii) above), (v) subordinate certain of its
claims vis-a-vis Operating to the lenders under the Secured Bank Facility and
(vi) consent to an amendment to the $275 million revolving facility portion of
the Guaranteed Bank Facilities that would extend the maturity of such facility
to beyond the maturity of Operating's Senior Notes (the Senior Notes are due
July 15, 2005). The Parent and Operating have agreed under the Motorola MOU that
they will compensate Motorola for providing guarantees, O&M Contract deferral
rights and other credit support (collectively, the "Motorola Exposure", which
generally includes the aggregate amount guaranteed by, or permitted to be
deferred by, Motorola) on the terms set forth in the Motorola ARG.
The Parent and Operating have also agreed under the Motorola MOU that
they (i) will use their best efforts to reduce the Motorola Exposure to no more
than $275 million by the earliest possible date, including obtaining bank credit
agreements not guaranteed by Motorola, issuing debt and equity securities (under
certain conditions) and using revenues from operations (if available) to reduce
the available borrowings under credit facilities guaranteed by Motorola and to
pay amounts deferred under contracts with Motorola, (ii) use their best efforts
to obtain, on or before October 1, 1999, a bank credit agreement (guaranteed by
Motorola on the conditions described above) to finance the payment of all
deferred amounts under the O&M Contract, (iii) will not have outstanding (in the
aggregate) in excess of (a) $1.7 billion of indebtedness for borrowed money that
is secured by the assets of Operating or (b) $1.62 billion in aggregate
principal amount of senior notes, (iv) will not make certain acquisitions
without Motorola's consent and (v) will provide Motorola with the right (in
addition to Motorola's rights to representation based on its holdings of Class 1
Interests) to appoint one additional director to the Boards of Directors of the
Parent and Operating any time the Motorola Exposure exceeds $275 million and the
right to appoint a second additional director to the Boards of Directors of the
Parent and Operating any time the Motorola Exposure exceeds $750 million.
Motorola's obligations to guarantee up to $300 million of borrowings
under the Secured Bank Facility and to defer receipt of up to $400 million in
payments under the O&M Contract are unconditional. All of Motorola's other
obligations under the Motorola MOU, including, without limitation, its
obligation to consent to and agree to an amendment to the Guaranteed Bank
Facilities and the related guarantee agreement (or to entry into a new bank
credit facility and guarantee agreement with the same material terms (other than
principal)) that together provide for a $350 million increase in the Motorola
guaranteed borrowings available thereunder, are conditioned upon the Parent and
Operating complying with the terms of the Motorola MOU, the Motorola ARG, the
O&M Contract and other agreements with Motorola, including their payment
obligations under each such agreement. In addition, while Motorola has agreed to
consent to (i) a $350 million increase in the amount of guaranteed borrowings
available under the Guaranteed Bank Facilities (or a new credit facility with
terms (other than pricing) identical in all material respects) if Operating's
conditional obligation to have Motorola guarantee borrowings under the Secured
Bank Facility terminates and (ii) to an extension of the maturity of the $275
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million revolving facility component of the Guaranteed Bank Facilities, there
can be no assurance that (i) Operating will satisfy the terms of the Secured
Bank Facility which would terminate its conditional obligation to have Motorola
guarantee borrowings under the Secured Bank Facility, (ii) the lenders under the
Guaranteed Bank Facilities would agree to any such amendments or (iii) that such
a new credit facility would be available.
Motorola ARG
In connection with the establishment of the Secured Bank Facility and
the Guaranteed Bank Facilities, Motorola, the Parent and Operating also entered
into the Motorola ARG which generally relates to the compensation obligations of
the Parent and Operating for Motorola's provision of credit support and which
amended and restated a previous agreement among the parties. Payments under the
Motorola ARG are based on the amount and duration of Motorola Exposure and are
due and payable quarterly. Prior to October 1, 1999, Motorola's compensation for
Motorola Exposure relating to the deferred amounts under the O&M Contract is
cash interest on the amount deferred at an annual interest rate of 12%. For
Motorola Exposure relating to guarantees of borrowings that exists prior to
October 1, 1999, the Parent and Operating generally are required to compensate
Motorola with cash interest and equity (including, at Motorola's option,
warrants to purchase either Class 1 Interests or shares of Class A Common
Stock). Prior to October 1, 1999, Motorola's compensation for Motorola Exposure
relating to the Guaranteed Bank Facilities and any bank facility used to
refinance the payment of amounts deferred under the O&M Contract is based on the
terms of Operating's Series A and Series B Senior Notes. This "High Yield Based
Compensation" equals (i) interest on the Motorola Exposure at an annual interest
rate equal to the amount, if any, by which the interest rate on the Guaranteed
Bank Facilities (or other bank facility) is less than 13.625% (the weighted
average interest rate on the Series A and Series B Senior Notes) plus (ii) the
payment warrants to purchase 66.758 Class 1 Interests of Iridium LLC (or shares
of Class A Common Stock) per day per each $100 million of Motorola Exposure at a
purchase price of $20.90 per interest (or share) (approximately the average
daily warrant compensation paid to purchasers of Series A Senior Notes).
After October 1, 1999, the Parent generally is required to pay
Motorola equity compensation (in the form of warrants to purchase Class 1
Interests at a purchase price of $0.00013 per interest) for all Motorola
Exposure unless the aggregate Motorola Exposure is less than or equal to $275
million, in which case the Parent and Operating may pay Motorola High Yield
Based Compensation. During this period, the amount of warrant compensation
payable per dollar of Motorola Exposure increases substantially as the Motorola
Exposure increases. In addition, the Parent is required to compensate Motorola
for any Motorola Exposure resulting from Motorola making available any part of
the additional $350 million in guarantees of borrowings discussed above (whether
with respect to existing borrowings under the Secured Bank Facility or new
borrowings) regardless of when such Motorola Exposure is incurred.
Motorola Has Earned and Is Expected to Earn Substantial Equity
Compensation. As of December 15, 1998, for providing guarantees of bank credit
facilities and other credit support, Motorola had earned warrants to purchase
(i) 7,741,346 Class 1 Interests at a price of $.00013 per interest and (ii)
39,828 Class 1 Interests at a price of $20.90 per interest. The amount of equity
compensation Motorola will earn in the future depends significantly upon the
amount of future Motorola Exposure and could be substantial for a variety of
reasons, including if the Parent and Operating are unable to reduce the Motorola
Exposure to $275 million or less prior to October 1, 1999. While the Parent and
Operating have agreed with Motorola that they will use their best efforts to
reduce the Motorola Exposure to $275 million or less as soon as possible, the
ability of the Parent and Operating to repay or replace borrowings guaranteed by
Motorola or pay or finance (without a Motorola guarantee) deferrals of amounts
due to Motorola depends on a variety of factors, including Operating's ability
to attract customers and generate revenues and factors beyond the control of the
Parent and Operating such as the condition of the bank lending and securities
markets. If the Parent and Operating reduce the Motorola Exposure to $275
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million for the period from October 1, 1999 through December 29, 2000 ($275
million of Motorola Exposure for approximately 15 months), Motorola would earn
warrants to purchase approximately 84,000 Class 1 Interests (or shares of
Class A Common Stock) at a price of $20.90 per interest (or share) plus cash
interest. However, if Operating draws all amounts available under the $750
million Guaranteed Bank Facilities and defers the payment of an aggregate of
$400 million under the O&M Contract and this aggregate amount of Motorola
Exposure remains in place in full from October 1, 1999 through December 29,
2000 ($1.15 billion of Motorola Exposure for approximately 15 months), Motorola
would earn warrants to purchase approximately 12.9 million Class 1 Interests at
a price of $0.00013 per interest pursuant to the Motorola ARG.
Estimated Funding Requirements and Sources and Uses of Funds by the Parent and
Operating
Estimated Sources and Uses of Funds for 1999. At year end 1998, the
Parent and Operating expect to have available for 1999 aggregate sources of
external funding of approximately $909 million, after giving effect to the
Offering. The Parent and Operating expect that their cash needs for 1999 will be
approximately $1.65 billion.
The following table summarizes the estimated funding requirements,
sources of funds and uses of funds of the Parent and Operating for 1999. You
should read the notes accompanying this table.
<TABLE>
<CAPTION>
Estimate Sources and Uses of Funds for 1999
-------------------------------------------
(dollars in millions)
Sources of Funds Uses of Funds
- ---------------- -------------
<S> <C> <C>
Space System Contract(4)........................ $ 55
Terrestrial network development
Cash balance at year end 1998...................... $ 10 contract(5)................................ 130
Additional amounts available under the
Secured Bank Facility(1)...................... 300 O&M Contract(2)................................. 537
Additional amounts available under the Business support systems and
Guaranteed Bank Facilities(1)................. 120 related expenditures....................... 100
Additional vendor financing amounts
(O&M contract) or the O&M bank
facility(2)................................... 314 Net interest and financing costs(6)............. 391
-----
$744 Acquisition of Claircom......................... 26
Operating expenses and working
capital......................................... 414
-----
Required revenues from operations or
other source(3)............................... 909
-----
Total estimated sources for 1999........... $1,653 Total estimated uses for 1999........... $1,653
===== =====
</TABLE>
(1) On December 23, 1998, Operating closed three new bank credit facilities
providing for an aggregate amount of approximately $1.55 billion of
borrowings - (i) The $800 million Secured Bank Facility and
(ii) the $750 million (collectively) Guaranteed Bank Facilities.
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Operating expects that as of December 31, 1998, it will have drawn $500
million under the Secured Bank Facility and an aggregate of $625 million
under the Guaranteed Bank Facilities. Operating used approximately $682
million of these funds to repay its outstanding bank debt, of which $410
million was due to mature on December 31, 1998.
(2) The O&M Contract provides for the day-to-day management of the space
segment of the Iridium system and Operating expects the O&M Contract to be
one of its single most significant uses of funds during its initial
operational stage. The O&M Contract is a fixed price contract (subject to
certain adjustments). Payments under the O&M Contract are expected to
aggregate approximately $2.88 billion over the initial five year term of
the contract ending in November 2003. Under the Motorola MOU, Motorola has
agreed to permit Operating to defer its obligations to pay up to an
aggregate of $400 million of payments until December 29, 2000. The Parent
and Operating have agreed with Motorola to use their best under the O&M
Contract efforts to obtain, on or before October 1, 1999, a bank credit
agreement (which Motorola has conditionally agreed to guarantee) to finance
the payment of all such deferrals by October 1, 1999. Operating expects to
finance the payment of approximately $400 million of deferred payments
under the O&M Contract by obtaining a new bank credit facility guaranteed
by Motorola by October 1, 1999. There can be no assurance that Operating
will be able to obtain such a new bank credit agreement.
(3) Parent's 1999 funding plans include a proposed public offering by IWCL of
shares of its Class A Common Stock and the investment by IWCL of the net
proceeds currently estimated at approximately $290 million in Parent's
Class 1 Interests. Pursuant to the Motorola MOU, Motorola has committed
to guarantee an additional $350 million of borrowings under Operating's
bank credit agreements. Currently, $300 million of this amount is reserved
in respect of Operating's contingent obligation to have Motorola
guarantee $300 million of borrowings under the Secured Bank Facility. This
conditional obligation of Operating terminates if Operating raises (though
the Parent and IWCL) at least $250 million in proceeds from equity
issuances prior to February 28, 1999. On the assumption that IWCL's
proposed offering will be completed by February 28, 1999, Parent's 1999
expected funding sources would also include an additional $350 million of
borrowings guaranteed by Motorola (subject to the availability of such a
bank credit facility). If IWCL's offering is completed as planned and the
additional $350 million of borrowing's guaranteed by Motorola is
available, the expected required revenues from operations or funds from
other sources would be reduced to approximately $300 million. There can
be no assurances that such proposed equity offering will be completed as
planned.
(4) No payments are expected to be due under the space system contract after
the first quarter of 1999.
(5) No payments are expected to be due under the terrestrial network
development contract after year end 1999.
(6) Based on the assumed interest payment obligations, interest rates and
borrowing levels and Operating's estimates of related costs. Actual
interest and financing costs will depend upon applicable interest rates and
the amount and timing of actual borrowings.
Estimated Funding Requirements and Sources of Funding After Year End
1999. The Parent and Operating expect that their funding requirements for the
provision of Iridium services and the operation of the Iridium system for the
two to three year period following year end 1999 will be based upon uses
similar in type to 1999: the costs of operating and maintaining the Iridium
system, including the O&M Contract; the costs of providing Iridium services;
working capital; interest expense; and financing costs. Following 1999, the
Parent and Operating generally expect to fund these cash needs through revenues
from operations. In addition, before December 29, 2000, Operating will be
required to repay at least approximately $1.28 billion in bank debt. The Parent
and Operating expect that on or prior to December 29, 2000, they will raise
additional financing and, if available, use revenues from operations to repay
such bank debt.
10
<PAGE> 11
FORWARD LOOKING STATEMENTS
All of the statements in this report regarding the expected
acquisition of Claircom and the registrants' expected funding requirements,
sources of funds and uses of funds for 1999 and thereafter are forward looking.
Actual results are likely to differ, and may differ materially, from the results
expressed or implied by such statements. These forward looking statements are
based on a number of assumptions, including the expectations of the Parent and
Operating about their ability to generate revenues from operations, and should
be viewed in light of, among other things, the following facts: (i) the Parent
and Operating have no meaningful history of operations or revenues and there is
no operational service that provides a direct comparison to the Iridium
services; (ii) the estimates of the Parent and Operating assume, among other
things, that Operating will transition smoothly from a development stage company
into an operating company, that the acquisition of Claircom will proceed as
expected and that there will be a sufficient number of customers for, and usage
of, Iridium services and the Iridium system to generate revenues in the amounts
and at the times anticipated by the Parent and Operating; (iii) the availability
of the additional sources of funding the Parent and Operating expect to be able
to use is not completely within their control and is conditioned upon the
satisfaction of certain conditions (including obtaining and retaining customers
and generating revenues); and (iv) the Parent and Operating face many challenges
and risks. It is likely that there would be a material adverse effect on the
Parent and Operating if actual funding requirements (net of revenues from
operations) significantly exceed current estimates. For a discussion of some of
the factors that could cause actual results to differ from those expressed or
implied by the forward looking statements included in this report, consult the
registrants' other filings with the Securities and Exchange Commission,
including Exhibit 99 to their report on Form 10-Q for the period ended
September 30, 1998.
11
<PAGE> 12
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, each
registrant has duly caused this report to be signed on its behalf by the
undersigned, hereunto duly authorized.
IRIDIUM LLC
By /s/ ROY GRANT
------------------------------
Name: Roy Grant
Title: Chief Financial Officer
IRIDIUM OPERATING LLC
By /s/ ROY GRANT
------------------------------
Name: Roy Grant
Title: Chief Financial Officer
IRIDIUM CAPITAL CORPORATION
By /s/ ROY GRANT
------------------------------
Name: Roy Grant
Title: Chief Financial Officer
IRIDIUM WORLD COMMUNICATIONS LTD.
By /s/ ROY GRANT
------------------------------
Name: Roy Grant
Title: Chief Financial Officer
IRIDIUM IP LLC
By /s/ ROY GRANT
------------------------------
Name: Roy Grant
Title: Chief Financial Officer
12
<PAGE> 13
IRIDIUM ROAMING LLC
By /s/ ROY GRANT
------------------------------
Name: Roy Grant
Title: Chief Financial Officer
IRIDIUM FACILITIES CORPORATION
By /s/ ROY GRANT
------------------------------
Name: Roy Grant
Title: Chief Financial Officer
Date: December 30, 1998
13
<PAGE> 14
<TABLE>
<CAPTION>
EXHIBIT INDEX
Exhibit
-------
Number Description
------ -----------
<S> <C>
1 Press Release-Expected Acquisition of Claircom, dated December
22, 1998
2 Stock Purchase Agreement, dated as of December 22, 1998, among
Iridium LLC, Iridium Aero Acquisition Sub, Inc., ATG I, Inc., AT&T
Wireless Services, Inc. and Rogers Cantel Inc.
3 Press Release-Establishment of New Bank Credit Facilities, dated
December 23, 1998
4 Form of the Senior Secured Credit Agreement among Iridium Operating
LLC, The Chase Manhattan Bank, Chase Securities Inc. and Barclays
Bank PLC and the lenders thereto, dated as of December 23, 1998
5 Form of the Senior Guaranteed Credit Agreement among Iridium
Operating LLC, The Chase Manhattan Bank, Chase Securities Inc.,
Barclays Bank PLC and the lenders thereto, dated as of December 23,
1998
6 Form of the Second Amended and Restated Memorandum of Understanding
among Motorola, Inc., Iridium LLC and Iridium Operating LLC, dated
as of December 23, 1998
7 Form of the Third Amended and Restated Agreement Regarding
Guarantee among Motorola, Inc., Iridium LLC and Iridium Operating
LLC, dated as of December 23, 1998
</TABLE>
14
<PAGE> 1
Exhibit 1
IRIDIUM TO PURCHASE CLAIRCOM AERONAUTICAL TELEPHONE BUSINESS FROM
AT&T
Acquisition secures powerful channel to reach business travelers, and advances
Iridium LLC position as Global Wireless Telephone Company
(WASHINGTON,D.C., December 22, 1998)
Iridium LLC announced today that it has reached an agreement to purchase
Claircom Communications Group, Inc. (Claircom) from AT&T and Rogers Cantel for
$65 million in cash and debt. The acquisition is subject to regulatory
approvals.
Claircom's inflight telephone services will complement Iridium's portfolio of
services tailored for the business-traveling professional. Following completion
of the transaction, the Claircom installations will carry the Iridium brand,
and will be integrated into Iridium's global wireless telephony and paging
offering.
"We envision a world in which Iridium customers will have the capability to go
virtually anywhere and always remain in touch - not only with their Iridium
handheld satellite phones and pagers, but also with Iridium phones installed on
commercial and private aircraft," said Edward F. Staiano, Vice Chairman and CEO
of Iridium LLC.
This transaction will enable the international business traveler and the
vertical markets, which include oil and gas, mining, transportation and other
industries with remote communications needs to communicate while airborne. For
these customers, the airplane is their principal mode of professional travel,
and the Iridium name on the telephones in those airplanes will be a valuable
asset.
Seattle-based Claircom began revenue service in 1993, and is the second largest
provider in the United States of telephone communications to commercial
airplanes. Claircom owns and operates a digital air-to-ground telephony network
consisting of 160 ground stations distributed across the United States, Canada
and Mexico, and two switching centers. The network currently serves passengers
with more than 100,000 inflight telephones on approximately 1,700 commercial
and executive aircraft. Claircom is also a major marketer of international
aeronautical equipment for satellite services, with installations on over 200
aircraft.
Iridium's satellite aeronautical services unit, scheduled to begin global
commercial service late Q1 1999 will join with Claircom to create a world class
aeronautical services business with products and services for all types of
aircraft and their passengers. The Iridium system will be capable of delivering
aeronautical communications services to the cockpits and cabins of commercial
airliners and personal and corporate aircraft. The system will provide
passenger communications for in-bound and out-bound calling, direct
communications to belt-worn pagers, and cockpit communications worldwide,
including previously unavailable polar route service.
Iridium LLC became the world's first global satellite phone and paging company
on November 1, 1998. The network of 66-low earth orbiting satellite s combined
with terrestrial cellular systems, enables subscribers to communicate virtually
anywhere in the world using one phone and pager, one phone number, and
receiving one monthly bill. Customers access participating local cellular
networks when available, and the Iridium satellite network when outside
terrestrial cellular coverage. Iridium World Communications, Ltd. (NASDAQ:
IRIDF) is the public investment vehicle of Iridium LLC.
<PAGE> 1
EXHIBIT 2
EXECUTION COPY
================================================================================
STOCK PURCHASE AGREEMENT
among
ATG I, INC.,
AT&T WIRELESS SERVICES, INC.,
ROGERS CANTEL INC.,
IRIDIUM LLC
and
IRIDIUM AERO ACQUISITION SUB, INC.
Dated as of December 22, 1998
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
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<S> <C>
ARTICLE 1 DEFINITIONS......................................................1
1.1 Definitions........................................................1
ARTICLE 2 PURCHASE AND SALE................................................9
2.1 Purchase and Sale..................................................9
2.2 Purchase Price.....................................................9
ARTICLE 3 CLOSING.........................................................10
3.1 Closing...........................................................10
3.2 Delivery and Payment..............................................10
3.3 Other Deliveries by Sellers.......................................10
3.4 Other Deliveries by Buyer Parties.................................11
3.5 Adjusted Working Capital and Purchase Price Adjustment............12
3.6 Other Adjustments.................................................13
3.7 Objections to Determination.......................................14
3.8 Treatment of Adjustments..........................................15
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE AWS PARTIES...............15
4.1 Organization of the AWS Parties; Authority........................15
4.2 Authorization; No Breach..........................................15
4.3 Organization of the Company.......................................16
4.4 Capitalization of the Company.....................................16
4.5 Share Ownership...................................................16
4.6 Governmental Consents.............................................17
4.7 Third Party Consents and Approvals................................18
4.8 Financial Matters.................................................18
4.9 Absence of Certain Changes........................................18
4.10 Real Property....................................................18
4.11 Compliance with Law..............................................19
4.12 Tax Matters......................................................19
4.13 Litigation.......................................................19
4.14 Contracts........................................................19
4.15 ERISA; Employee Benefits.........................................20
4.16 Labor Difficulties...............................................22
4.17 Insurance........................................................22
4.18 Environmental Matters............................................22
4.19 Undisclosed Liabilities..........................................22
4.20 Books and Records................................................22
</TABLE>
i
<PAGE> 3
TABLE OF CONTENTS
(continued)
<TABLE>
<CAPTION>
PAGE
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<S> <C>
4.21 Customers and Suppliers..........................................22
4.22 Projections......................................................23
4.23 Year 2000 Compliance.............................................23
4.24 Related Party Transactions.......................................23
4.25 Currency.........................................................23
4.26 Accuracy of Copies...............................................23
4.27 Brokers and Intermediaries.......................................23
4.28 Penalties .......................................................24
4.29 LIMITATION.......................................................24
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF CANTEL........................24
5.1 Organization of Cantel; Authority.................................24
5.2 Authorization; No Breach..........................................24
5.3 Share Ownership...................................................25
5.4 Governmental Consents.............................................25
5.5 Third Party Consents and Approvals................................25
5.6 Litigation........................................................25
5.7 Brokers and Intermediaries........................................25
5.8 Canadian Organization, Authority and Licenses.....................25
5.9 LIMITATION........................................................26
ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF BUYER.........................26
6.1 Organization of Buyer; Authority..................................26
6.2 Authorization; No Breach..........................................26
6.3 Financial Capability..............................................27
6.4 Consents..........................................................27
6.5 Third Party Consents and Approvals................................27
6.6 Litigation........................................................27
6.7 Acquisition of Shares.............................................27
6.8 Maintenance of Corporate Existence................................27
6.9 Compliance and Qualifications.....................................28
6.10 Brokers and Intermediaries.......................................28
6.11 LIMITATION.......................................................28
ARTICLE 7 CERTAIN PRE-CLOSING COVENANTS AGREEMENTS OF THE PARTIES.........28
7.1 Access and Information............................................28
7.2 Conduct of the Business...........................................29
7.3 AWS Commitments...................................................31
</TABLE>
ii
<PAGE> 4
TABLE OF CONTENTS
(continued)
<TABLE>
<CAPTION>
PAGE
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<S> <C>
7.4 Insurance.........................................................31
7.5 Iridium Commitments...............................................31
7.6 Announcements.....................................................32
7.7 Further Actions...................................................32
7.8 Expenses..........................................................33
7.9 Advertising.......................................................34
7.10 Certain Liabilities..............................................34
7.11 Canadian Service Marks...........................................34
7.12 Certain Working Capital Matters. ...............................34
7.13 AirOne Canada Letter Agreement...................................35
ARTICLE 8 OTHER COVENANTS AND AGREEMENTS OF THE PARTIES...................35
8.1 Employee Matters..................................................35
8.2 Access to Books and Records.......................................37
8.3 Tax Matters.......................................................41
8.4 Contingent Payment................................................42
8.5 Maintenance of Corporate Existence................................43
8.6 Confidentiality...................................................43
8.7 Further Assurances................................................44
ARTICLE 9 CONDITIONS PRECEDENT OF SELLER PARTIES..........................44
9.1 Representations and Warranties....................................44
9.2 Agreements........................................................44
9.3 Buyer Certificate.................................................44
9.4 Compliance with Law...............................................44
9.5 Consents..........................................................44
9.6 Opinion of Counsel to Buyer Parties...............................45
9.7 Release of Guarantees.............................................45
9.8 Notes.............................................................45
9.9 AirOne Canada Documentation ......................................45
ARTICLE 10 CONDITIONS PRECEDENT OF BUYER PARTIES...........................45
10.1 Representations and Warranties...................................45
10.2 Agreements.......................................................45
10.3 No Material Adverse Change. ....................................45
10.4 Sellers' Certificates............................................46
10.5 Compliance with Law..............................................46
10.6 Consents.........................................................46
10.7 Opinions of Counsel to Seller Parties............................46
</TABLE>
iii
<PAGE> 5
TABLE OF CONTENTS
(continued)
<TABLE>
<CAPTION>
PAGE
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<S> <C>
10.8 FIRPTA Certificates..............................................46
10.9 AirOne Canada Documentation. ...................................46
ARTICLE 11 SURVIVAL OF REPRESENTATIONS AND WARRANTIES......................46
11.1 Survival of Representations and Warranties.......................46
ARTICLE 12 INDEMNIFICATION.................................................47
12.1 Indemnification of Buyer Parties.................................47
12.2 Indemnification of Seller Parties................................47
12.3 Claims...........................................................47
12.4 Limitation of Liability..........................................48
12.5 Manner of Payment................................................49
ARTICLE 13 TERMINATION.....................................................49
13.1 Grounds for Termination..........................................49
13.2 Effect of Termination............................................49
ARTICLE 14 MISCELLANEOUS...................................................50
14.1 GOVERNING LAW....................................................50
14.2 Notices..........................................................50
14.3 Entire Agreement.................................................52
14.4 Amendments.......................................................53
14.5 Headings; References.............................................53
14.6 Counterparts.....................................................53
14.7 Parties in Interest; Assignment..................................53
14.8 Severability: Enforcement........................................53
14.9 Jurisdiction; Venue; Waiver of Jury Trial........................53
14.10 Waiver..........................................................54
14.11 Disclosure Schedules............................................54
SCHEDULES
Schedule X -- Adjusted Working Capital
Schedule Y -- Terms of Eligible Fleet Agreement
Schedule 3.2 -- Stock Ownership
Schedule 3.6 -- Existing Carrier Agreements
Schedule 3.6(c)(ii) -- CapEx Target Amount
Schedule 4.6(b) -- FCC Licenses
Schedule 4.6(c) -- Canada Licenses
Schedule 4.6(d) -- CDM Licenses
</TABLE>
iv
<PAGE> 6
TABLE OF CONTENTS
(continued)
<TABLE>
<CAPTION>
PAGE
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<S> <C>
Schedule 4.13 -- Litigation
Schedule 4.14 -- Significant Contracts
Schedule 4.15(a) -- Benefit Plans
Schedule 4.15(h) -- Exceptions to Employee Pension Benefit Plan
Schedule 4.18 -- Environmental Permits
Schedule 4.21 -- Principal Customers
Schedule 5.8 -- AirOne Canada Communications Licenses
Schedule 7.2(c) -- Collective Bargaining Agreements
Schedule 7.3(c) -- Intercompany Accounts
Schedule 8.1(g) -- Final List
EXHIBITS
Exhibit A-1 -- Form of Intellectual Property Agreement
Exhibit A-2 -- Form of Business Marks Assignment Agreement
Exhibit B -- Form of Iridium Guarantee
Exhibit C-1 -- Form of First Promissory Note
Exhibit C-2 -- Form of Second Promissory Note
Exhibit D-1 -- Form of Pledge Agreement
Exhibit D-2 -- Form of Pledge and Security Agreement
Exhibit E -- Form of Transition Services Agreement
Exhibit F -- Form of Opinion of Counsel to Buyer Parties
Exhibit G -- Forms of Opinions of Counsel to Seller Parties
</TABLE>
v
<PAGE> 7
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of December 22,
1998, among ATG I, Inc., a Delaware corporation ("ATG"), AT&T Wireless Services,
Inc., a Delaware corporation and direct owner of all the issued and outstanding
capital stock of ATG ("AWS" and together with ATG, the "AWS Parties"), Rogers
Cantel Inc., a Canadian corporation ("Cantel" and together with ATG, "Sellers"),
and Iridium LLC, a Delaware limited liability company ("Iridium"), and Iridium
Aero Acquisition Sub, Inc., a Delaware corporation and a wholly-owned subsidiary
of Iridium ("Buyer" and together with Iridium, the "Buyer Parties").
W I T N E S S E T H:
WHEREAS, Sellers are the direct owners of all the issued and outstanding
shares (the "Shares") of capital stock of Claircom Communications Group, Inc.
(d/b/a AT&T Wireless Services, Aviation Communications Division), a Delaware
corporation (the "Company");
WHEREAS, upon the terms and conditions herein set forth, Buyer desires to
purchase from Sellers, and Sellers desire to sell to Buyer, the Shares.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants, conditions and promises hereinafter set forth, the parties hereby
agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions. For purposes of this Agreement, the following terms have
the meanings set forth below:
"ACHI" means AirOne Canada Holdings Inc., a corporation organized under
the laws of Canada, the capital stock of which is owned 80% by Cantel and 20% by
the Company.
"Adjusted Working Capital" means the adjusted working capital of the
Company at Closing as determined pursuant to Schedule X.
"Adjusted Working Capital Statement" has the meaning set forth in Section
3.5(a).
"Adverse Conditions" means, with respect to any Person, conditions
contained in any ruling or order of a Governmental Body that individually or in
the aggregate would have, or be likely to have, a Material Adverse Effect on
such Person.
<PAGE> 8
"Affiliate" means, with respect to any Person, any other Person directly
or indirectly controlling, controlled by, or under common control with such
other Person. For the purposes of this definition, "control" (including, with
correlative meaning, the terms "controlled by" and "under common control with"),
as used with respect to any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting securities or
by contract or otherwise.
"AirOne Canada Communications" means the Canadian corporation that is
wholly owned by ACHI.
"AirOne Canada Letter Agreement" has the meaning set forth in Section
10.9.
"Allocation Agreement" has the meaning set forth in Section 8.3(e)(ii).
"Applicable Value" has the meaning set forth in Section 8.4(a).
"Appraiser" has the meaning set forth in Section 8.4(c).
"AT&T Corp." means AT&T Corp., a New York corporation.
"AT&T Receivables" has the meaning set forth in Section 3.5(d)
"ATG" has the meaning set forth in the preamble.
"AWS" has the meaning set forth in the preamble.
"AWS Parties" has the meaning set forth in the preamble.
"Base Amount" means $3,691,720.
"Benefit Plans" has the meaning set forth in Section 4.15(a).
"Best efforts" means the efforts that a prudent Person desirous of
achieving a result would use in similar circumstances to ensure that such result
is achieved. Without limiting the generality of the foregoing, an obligation to
use "best efforts" under this Agreement does not require the Person subject to
such obligation to make expenditures that materially decrease the economic
benefits accruing to such Person under this Agreement. Subject to the preceding
sentence, the obligation of a Person under this Agreement to use "best efforts"
to achieve a result that benefits another party to this Agreement requires such
Person to use the same resources that such person would have reasonably used in
achieving a similar result that would have benefitted such Person.
"Business Day" means a day other than a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required to close.
2
<PAGE> 9
"Buyer" has the meaning set forth in the preamble.
"Buyer Parties" has the meaning set forth in the preamble.
"CDM" means Claircom de Mexico, S.A. de C.V., a company organized under
the laws of Mexico.
"Cantel" has the meaning set forth in the preamble.
"Cantel Payment" has the meaning set forth in Section 2.2.
"CapEx Target Amount" means the sum of (a) the amount set forth in column
B of Schedule 3.6(c)(ii) opposite the month set forth in column A of Schedule
3.6(c)(ii) in which the FCC Consent Date falls and (b) the product of the amount
set forth in column C of Schedule 3.6(c)(ii) opposite such month multiplied by a
fraction in which the numerator is the day of the month corresponding to the FCC
Consent Date and the denominator is the number of days in such month.
"Capital Expenditures" has the meaning set forth in Section 3.6(c)(iii).
"Cash Amount" means the amount of $9 million, subject to adjustment
pursuant to Section 3.6(c).
"Claircom Licensee" means Claircom Licensee Corporation, a Delaware
corporation, and a wholly-owned subsidiary of the Company.
"Closing" has the meaning set forth in Section 3.1.
"Closing Date" has the meaning set forth in Section 3.1.
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Stock" has the meaning set forth in Section 4.4.
"Company" has the meaning set forth in the preamble.
"Company Employees" has the meaning set forth in Section 8.1.
"Company Revenue" means the revenue of the Company, which is calculated
consistent with GAAP and the following principles: (i) air-to-ground airtime
revenue is recognized when usage occurs, (ii) domestic service revenues are
recognized, net of revenue-based commissions and costs associated with billing,
collection and settlement services provided on behalf of the Company, when
earned, (iii) international service revenues are recognized net of any
contractual withholding amounts due to the applicable service provided, when
earned, (iv) sales of equipment
3
<PAGE> 10
and related services are recognized when such goods and services are shipped and
(v) royalty revenue is recognized when received pursuant to existing
royalty-based agreements.
"Company Subsidiary" means any entity in which the Company has a direct
or indirect equity interest in excess of at least 15%.
"Consultants" has the meaning set forth in Section 4.15(a).
"Contingent Amount" has the meaning set forth in Section 8.4(a).
"Damages" has the meaning set forth in Section 12.1.
"Directors" has the meaning set forth in Section 4.15(a).
"Disclosure Schedule" means the Disclosure Schedule of the AWS Parties,
Cantel or Buyer, as the case may be, delivered pursuant to this Agreement.
"Eligible Carrier" means United Airlines, Continental Airlines or Delta
Airlines.
"Eligible Fleet Agreement" means a binding agreement with an Eligible
Carrier, with respect to the domestic and international fleet of such Eligible
Carrier in the case of United Airlines or Continental Airlines, or the domestic
fleet in the case of Delta Airlines, containing terms no less favorable in the
aggregate than the terms described on Schedule Y hereto.
"Employees" has the meaning set forth in Section 4.15(a).
"Encumbrances" means any and all liens, claims, pledges, charges,
security interests, limitations, encumbrances and restrictions of any kind.
"Environmental Law" means all applicable state, federal and local laws,
regulations and rules, including common law, permits, licenses, registrations
and other governmental authorizations, judgments, decrees and orders relating to
pollution or the protection of the environment or the protection of public
health and safety from environmental concerns, in each case as of the Closing
Date.
"Environmental Permits" has the meaning set forth in Section 4.18.
"Equity Sale Value" has the meaning set forth in Section 8.4(a).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" has the meaning set forth in Section 4.15(c).
4
<PAGE> 11
"ERISA Affiliate Plan" has the meaning set forth in Section 4.15(c).
"Existing Carrier Agreements" means those agreements set forth on
Schedule 3.6 hereto.
"FAA" means the Federal Aviation Administration and any successor agency
or body.
"FCC" means the Federal Communications Commission and any successor
agency or body.
"FCC Consent" means an order of the FCC, or by the staff of the FCC
acting pursuant to delegated authority, granting its consent to the applications
referred to in Section 7.7(c) of this Agreement required to permit the
consummation of the Transactions.
"FCC Consent Date" means the date on which Public Notice is given of the
FCC Consent pursuant to Section 1.4 of the FCC's rules and regulations.
"FCC Licenses" means Licenses issued by the FCC.
"Final List" has the meaning set forth in Section 8.1.
"Final Order" means any FCC action that, by lapse of time or otherwise is
no longer subject to timely administrative or judicial reconsideration, review,
appeal or stay; provided, however, that the FCC Consent shall be deemed to have
become a Final Order 40 days after the FCC Consent Date unless the FCC Consent
has been stayed or Iridium, in its good faith judgment, believes that any
then-pending timely administrative or judicial reconsideration, review, appeal
or stay is likely to lead to the FCC Consent being set aside or denied or the
imposition of any Adverse Conditions with respect to Iridium or the Company and
Iridium so notifies AWS in writing within such 40 day period.
"Final Working Capital" has the meaning set forth in Section 3.5(a).
"Foreign Licenses" has the meaning set forth in Section 7.7(f).
"GAAP" means generally accepted accounting principles in the United
States.
"Governmental Body" means any domestic or foreign national, state,
multi-state or municipal or other local government, any subdivision, agency,
commission or authority thereof, any court, or any quasi-governmental or private
body exercising any regulatory or taxing authority thereunder.
"Guarantees" has the meaning set forth in Section 7.5(b).
5
<PAGE> 12
"Hazardous Substances" means any pollutant or contaminant or any toxic or
hazardous substance, material or waste, as those terms are defined in any
Environmental Law.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended.
"Indemnifying Party" has the meaning set forth in Section 12.3.
"Indemnitee" has the meaning set forth in Section 12.3.
"Independent Accountant" has the meaning set forth in Section 3.7(b)(i).
"Intellectual Property Agreements" means (i) the Intellectual Property
Agreement, dated as of the Closing Date, in the form of Exhibit A-1 hereto, and
(ii) the Business Marks Assignment Agreement, dated as of the Closing Date, in
the form of Exhibit A-2 hereto.
"Interim 1998 Financial Statements" has the meaning set forth in Section
4.8(b).
"Iridium" has the meaning set forth in the preamble.
"Iridium Guarantee" means the guarantee, dated as of the Closing Date, by
Iridium in favor of the Sellers, in the form of Exhibit B hereto.
"IRS" means the Internal Revenue Service.
"Knowledge", "aware of" and similar terms, with respect to the AWS
Parties, means the knowledge, after reasonable inquiry, of Mark Thomas, Margaret
Schimpf, Charles Aest, Mary Brodd and David Bruner, and with respect to the
Buyer Parties, means the knowledge, after reasonable inquiry, of Leo Mondale and
F. Thomas Tuttle.
"Laws" means statutes, laws, regulations and rules of any Governmental
Body.
"Leased Property" has the meaning set forth in Section 4.10.
"Leases" has the meaning set forth in Section 4.10.
"License" means a license, permit, certificate of authority, waiver,
approval, certificate of public convenience and necessity, registration or other
authorization consent or clearance (including, without limitation, any FAA
aeronautical hazard determinations) to construct or operate a facility,
including any emissions, discharges or releases therefrom, or to transact an
activity or business to construct a ground station or to use an asset or
process, in each case issued or granted by a Governmental Body.
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"Liquid Investments" means certificates of deposits, securities and other
financial investments that are readily salable for cash without any
restrictions.
"Litigation" means a suit, legal action or arbitration.
"Material Adverse Effect" on a Person means a material adverse effect on
the business, assets, results of operations or financial condition of such
Person and its controlled affiliates taken as a whole.
"1997 Financial Statements" has the meaning set forth in Section 4.8(a).
"Nondisclosure Agreements" means that certain Nondisclosure Agreement
between Iridium LLC and the Company dated October 7, 1997, as supplemented by
letters between Iridium LLC and the Company dated October 7, 1997 and July 6,
1998 (which letter included AWS), that certain Addendum to Nondisclosure
Agreement among Iridium LLC, the Company and AWS dated as of July 6, 1998, and
the Individual Nondisclosure Agreement dated as of July 6, 1998 among the
Company, AWS and Mr. Neal Meehan.
"Notes" means those certain promissory notes to be executed by the
Company in favor of ATG, in the aggregate principal amount of $39,400,000,
subject to adjustment in accordance with Sections 3.5 and 3.6, in the form of
Exhibits C-1 and C-2 hereto. Any such adjustment shall be made in the principal
amount of each Note in the proportion that such principal amount bears to the
aggregate principal amount of the Notes prior to such adjustment.
"Other Assets" has the meaning set forth in Section 8.4(c).
"Penalty Amount" means an amount equal to the penalties accrued and that
will accrue under the applicable airline contracts in connection with the
Company's failure to install or deliver any equipment in accordance with the
1999 Projected Installation Schedule (including, for the avoidance of doubt, any
penalties incurred under contracts with SAS) attached to Schedule X. Such
Penalty Amount shall include (i) penalties accrued up to the Closing Date and
(ii) penalties projected to accrue for a period of up to 90 days thereafter,
assuming that installation or delivery of the equipment affected by such failure
will be made on a timetable consistent with the Company's past practices.
"Pension Plan" has the meaning set forth in Section 4.15(b).
"Person" means an individual, corporation, partnership, trust,
unincorporated organization or other entity, or a Governmental Body.
"Pledge Agreement" means the Pledge Agreement, dated as of the Closing
Date, in the form of Exhibit D-1 hereto.
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"Pre-Closing Interest" means interest at a rate of 8% per annum accruing
on a specified principal amount from and including the FCC Consent Date to (but
excluding) the Closing Date.
"Preferred Stock" has the meaning set forth in Section 4.4.
"Purchase Price" has the meaning set forth in Section 2.2.
"Related Agreements" means the Notes, the Security Agreement, the Iridium
Guarantee, the Pledge Agreement, the Transition Services Agreement and the
Intellectual Property Agreements.
"Returns" means any return, report, estimate, declaration, information
return and statement of any nature with respect to Taxes, any declarations of
estimated Tax or any Tax reports.
"Sale Transaction" has the meaning set forth in Section 8.4(a).
"SAS" means Scandinavian Airlines System.
"Security Agreement" means the Pledge and Security Agreement, dated as of
the Closing Date, in the form of Exhibit D-2 hereto.
"Seller Parties" means AWS, ATG and Cantel.
"Sellers" has the meaning set forth in the preamble.
"Service Marks" has the meaning set forth in Section 7.11.
"Shares" has the meaning set forth in the preamble.
"Significant Contracts" has the meaning set forth in Section 4.14.
"Significant Party" has the meaning set forth in Section 7.5(c).
"Split Period" has the meaning set forth in Section 8.3(a)(i).
"Tax" or "Taxes" means any United States federal, state, local or foreign
income, business, occupation, environmental, gross receipts, ad valorem,
alternative or add-on minimum tax profits, severance, franchise, license,
transfer, sales, use, value added, payroll, employment, withholding, pension
plan, property (real or personal), production, excise or similar taxes
(including interest, penalties or additions to such taxes and any interest in
respect of such penalties or additions).
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"Tax Arbitrator" has the meaning set forth in Section 8.3(f).
"Tax Package" has the meaning set forth in Section 8.3(i).
"Tax Purchase Price" has the meaning set forth in Section 8.3(e)(ii).
"Tax Return" means any return, report, information return or other
document (including any related or supporting information) required to be filed
with any authority with respect to Taxes.
"Third Party Claims" has the meaning set forth in Section 12.3.
"Transaction Consideration" means the sum of (i) the Purchase Price and
(ii) the aggregate principal amount of the Notes, as adjusted pursuant to
Section 3.6, plus the Working Capital Excess, if any, or minus the Working
Capital Deficiency, if any.
"Transactions" means the transactions contemplated by this Agreement and
the Related Agreements.
"Transition Services Agreement" means the Transition Services Agreement,
dated as of the Closing Date, in the form of Exhibit E hereto.
"Treasury Regulations" means the rules and regulations of the IRS
promulgated under the Code.
"Value Period" has the meaning set forth in Section 8.4(a).
"Working Capital Deficiency" has the meaning set forth in Section
3.5(c)(ii).
"Working Capital Excess" has the meaning set forth in Section 3.5(c).
ARTICLE 2
PURCHASE AND SALE
2.1 Purchase and Sale. Subject to the terms and conditions of this
Agreement, each of the Sellers agrees to sell, transfer, and deliver to Buyer,
and Buyer agrees to purchase and accept from each of the Sellers, at the
Closing, good, valid and marketable title to the Shares owned by such Seller,
free and clear of any Encumbrances, for the consideration specified in Section
2.2.
2.2 Purchase Price. Subject to the terms and conditions of this
Agreement, in consideration of the sale of the Shares, Buyer shall pay in cash
at the Closing, as the full purchase
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price for the Shares, (a) to Cantel, $1,000,000 plus, if the Closing occurs more
than fifteen days after the FCC Consent Date, the amount of Pre-Closing Interest
thereon (the "Cantel Payment"), and (b) to ATG, $24,600,000 plus, if the Closing
occurs more than fifteen days after the FCC Consent Date, the amount of
Pre-Closing Interest thereon (the "ATG Payment" and, together with the Cantel
Payment, the "Purchase Price"). The ATG Payment shall be subject to adjustment
as provided in Sections 3.5 and 3.6.
ARTICLE 3
CLOSING
3.1 Closing. The closing of the Transactions (the "Closing") will take
place at the offices of Sullivan & Cromwell, 125 Broad Street, New York, New
York 10004 at 10:00 a.m. (local time) on the first Business Day after the
satisfaction or waiver of the conditions precedent in Sections 9.5 and 10.6, or
at such other time and place as Buyer and AWS shall agree in writing (the
"Closing Date").
3.2 Delivery and Payment. At the Closing, (a) each Seller shall deliver
to Buyer the stock certificates representing the Shares owned by such Seller set
forth opposite its name on Schedule 3.2 hereto, with duly executed stock powers
in blank and all requisite stock transfer tax stamps attached, and (b) Buyer
shall pay the Purchase Price (as adjusted) by wire transfer to Sellers in
immediately available funds to bank accounts designated by Sellers at least
three Business Days before the Closing Date.
3.3 Other Deliveries by Sellers.
A. At the Closing, AWS shall deliver, or cause the Company to deliver, to
Buyer the following:
(a) Certificates as to the good standing of AWS, ATG and the Company in
their respective states of organization;
(b) Certificates representing the issued and outstanding shares of the
Company's Common Stock owned by ATG;
(c) The resignations of all directors, other than the director designated
by Cantel, from the Board of Directors of the Company;
(d) The officer's certificates of AWS and ATG referred to in Section
10.4;
(e) The opinions of counsel referred to in Section 10.7;
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(f) Certificates of the Secretary of each of AWS and ATG as to (i) the
resolutions of such Seller Party with respect to the Agreement and the
Transactions and (ii) the incumbency of the officers of such Seller Party
executing the Agreement and the Related Agreements;
(g) A certificate of the Secretary of the Company as to the resolutions
of the Company's shareholders and directors with respect to the Notes;
(h) The Transition Services Agreement;
(i) Any other instruments and documents required to be delivered by the
AWS Parties or the Company at the Closing.
B. At the Closing, Cantel shall deliver to Buyer the following:
(a) Certificates representing the issued and outstanding shares of the
Company's Common Stock owned by Cantel;
(b) The resignation of the director designated by Cantel from the Board
of Directors of the Company;
(c) The officer's certificate of Cantel referred to in Section 10.4;
(d) The opinion of counsel to Cantel referred to in Section 10.7;
(e) A certificate of the Secretary of Cantel as to (i) the resolutions of
Cantel with respect to the Agreement, the Transactions and the AirOne Canada
Letter Agreement and (ii) the incumbency of the officers of Cantel executing the
Agreement and the AirOne Canada Letter Agreement; and
(f) Any other instruments and documents required to be delivered by
Cantel at the Closing.
3.4 Other Deliveries by Buyer Parties. At the Closing, Buyer shall
deliver, or cause Iridium to deliver, as applicable, to Sellers the following:
(a) Certificate as to the good standing of Buyer and Iridium in their
states of organization;
(b) The officer's certificates of Buyer and Iridium referred to in
Section 9.3;
(c) Opinions of counsel to each of Buyer and Iridium referred to in
Section 9.6;
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(d) Certificates of the Secretary of Buyer and Iridium as to (i) the
resolutions of Buyer and Iridium with respect to the Agreement and the
Transactions and (ii) the incumbency of the officers of Buyer and Iridium
executing the Agreement and the Related Agreements to which they are a party;
(e) The Iridium Guarantee;
(f) The Pledge Agreement;
(g) The Intellectual Property Agreements;
(h) The Security Agreement; and
(i) Any other instruments and documents required to be delivered by Buyer
or Iridium at the Closing.
3.5 Adjusted Working Capital and Purchase Price Adjustment.
(a) Determination of Final Working Capital. On or as promptly as
practicable after the Closing Date, but in no event later than 60 days following
the Closing Date, AWS will determine the Company's Adjusted Working Capital as
of the Closing Date in accordance with the provisions of Schedule X. Upon
completion of such determination, AWS will deliver to Buyer a statement (an
"Adjusted Working Capital Statement") setting forth its determination of the
Adjusted Working Capital. The Adjusted Working Capital shown on the Adjusted
Working Capital Statement shall be deemed the final determination of such amount
unless Buyer objects to such determination in accordance with Section 3.7, in
which case the final determination of such amount shall be made in accordance
with Section 3.7 (such amount as so finally determined is referred to herein as
the "Final Working Capital").
(b) Penalty Amount. Notwithstanding any other provisions of this
Agreement or of Schedule X, the Adjusted Working Capital Statement shall include
within "Accrued Expenses" the Penalty Amount, if any, and shall attach as an
exhibit to the Adjusted Working Capital Statement an explanation of, and
supporting documentation for, the calculation of the Penalty Amount, including
the revised installation schedule used to determine the Penalty Amount.
(c) Payment Amounts. (i) If the Final Working Capital exceeds the Base
Amount, Buyer shall pay to ATG the amount of such excess (the "Working Capital
Excess"), subject to the conditions set forth in paragraph (d); provided,
however, that notwithstanding anything to the contrary in this Section 3.5,
Buyer shall have no obligation under this sentence to pay to ATG an amount that
is greater than the sum of (A) $5,000,000 and (B) the amount of all AT&T
Receivables eligible for assignment in accordance with paragraph (d) below.
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(ii) If the Final Working Capital is less than the Base Amount, ATG shall
pay to Buyer the amount of such deficiency (the "Working Capital Deficiency"),
subject to the conditions set forth in paragraph (d) below.
(iii) Any payment required under this Section 3.5(c) shall be made within
5 days following the determination of the Final Working Capital.
(d) Payment Methods. Buyer shall pay any amount that it is required to
pay to ATG pursuant to clause (c)(i) of this Section 3.5 by the execution of
customary documentation to effect an absolute and unconditional assignment to
ATG of outstanding receivables owed to the Company by any Affiliate of AWS (the
"AT&T Receivables"). To the extent the AT&T Receivables are insufficient to
cover the entire amount of Buyer's Section 3.5(c)(i) payment obligations, Buyer
shall make up such shortfall with any combination of (i) cash and (ii) an
increase in the principal amount of the Notes, provided that after giving effect
to such increase the ratio of (x) the principal amount of the Notes, after
excluding any adjustment made pursuant to Section 3.6, to (y) the sum of the
Purchase Price and the cash referred to in the preceding clause (i) shall not
exceed 3:2. At Buyer's option, Buyer may require ATG to pay any amount required
to be paid by ATG to Buyer pursuant to clause (c)(ii) of this Section 3.5 by any
combination of (i) cash and (ii) a decrease in the aggregate principal amount of
the Notes, provided that after giving effect to any such cash payment the ratio
of (x) the aggregate principal amount of the Notes, after excluding any
adjustment made pursuant to Section 3.6, to (y) (I) the Purchase Price minus
(II) the amount of such cash payment shall not exceed 3:2. The amount of any
payment that Buyer is required to make pursuant to Section 3.5(c)(i) that is
satisfied by the assignment of AT&T Receivables shall be equal to the face
amount of the AT&T Receivables so assigned, and the amount of any payment that
Buyer or ATG is required to make pursuant to Section 3.5 (c)(i) or (ii), as the
case may be, that is satisfied by an increase or a decrease in the principal
amount of the Notes shall be the amount of such increase or decrease, as the
case may be. If Buyer effects an assignment of any AT&T Receivables, all risk of
collectibility and liability for any deficiencies shall be the sole
responsibility of ATG.
3.6 Other Adjustments.
(a) Eligible Fleet Agreements. In the event that prior to the Closing
Date the Company and an Eligible Carrier enter into an Eligible Fleet Agreement,
AWS shall cause the Company to promptly deliver a complete and correct copy
thereof to Buyer (and in any case at least three Business Days prior to the
Closing), together with a calculation in reasonable detail as to the adjustment
to the Transaction Consideration resulting therefrom. The Transaction
Consideration shall be increased by an amount equal to the sum of (i) $50,000
multiplied by the number of airplanes covered by such Eligible Fleet Agreement
with respect to which a firm order has been placed and (ii) $10,000 multiplied
by the number of airplanes covered by such Eligible Fleet Agreement with respect
to which an option to order the services of the Company has been granted. Any
such increase may be paid, at Buyer's option, by any combination of (i) an
increase in the aggregate principal amount of the Notes or (ii) an increase in
the ATG Payment; provided that in no case shall the ratio of the aggregate
principal amount of the Notes to the Purchase Price exceed 4:1.
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(b) Existing Carrier Agreements. In the event that prior to the Closing
Date an Existing Carrier Agreement shall be terminated, the Company shall
promptly give notice thereof to Buyer, together with a calculation in reasonable
detail as to the adjustment to the Transaction Consideration resulting
therefrom. The Transaction Consideration shall be decreased by an amount equal
to $50,000 multiplied by the number of airplanes covered by such Eligible Fleet
Agreement. Any such decrease shall be reflected by a decrease in the principal
amount of the Notes.
(c) Capital Expenditures.
(i) At least three Business Days prior to the Closing, AWS shall
provide to Buyer a statement setting forth in reasonable detail the Capital
Expenditures made by the Company between November 1, 1998 and the FCC Consent
Date. Buyer shall have 60 days from the Closing Date to object to such
statement, in which case the provisions of Section 3.7(b) shall apply unless the
parties otherwise agree. Once the amount of such Capital Expenditures is finally
determined pursuant to Section 3.7, any adjustment due in respect thereof shall
be paid in cash by the applicable party within 5 days following such
determination.
(ii) If the amount of the Capital Expenditures is less than the
CapEx Target Amount, AWS shall pay to the Company, as an adjustment of the Cash
Amount, an amount equal to such deficiency. If the amount of the Capital
Expenditures exceeds the CapEx Target Amount, Buyer shall cause the Company to
pay to AWS, as an adjustment of the Cash Amount, an amount equal to such excess.
(iii) For purposes of this Section, "Capital Expenditures" means
all costs associated with the acquisition and placing into service of all fixed
assets and property of the Company, including but not limited to the labor,
non-labor and equipment costs associated with installations of telephone and
SATCOM systems on commercial aircraft, product development and network
enhancements of ground and air network products, and investments in AirOne
Canada installations, and excluding all costs allocated to the Company's program
with SAS. All determinations concerning the designation of an item as a Capital
Expenditure hereunder shall be made by the Company in accordance with GAAP and
with the past practices and procedures of the Company.
3.7 Objections to Determination.
(a) Initial Objections. If Buyer believes that any determination
(including initial and revised calculations) made by AWS pursuant to Section 3.5
or 3.6 is incorrect, it may object thereto by delivering to AWS a statement of
its objections in reasonable detail within 15 days after the delivery to it of
the determination in question. Buyer and AWS shall attempt to resolve any such
disagreement promptly, but if agreement has not been reached within 10 days of
receipt of such
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objections, the disagreement shall be resolved forthwith in accordance with the
provisions of paragraph (b) of this Section 3.7.
(b) Determination by Independent Accountant.
(i) Any disagreement referred to in paragraph (a) above shall be
submitted forthwith to arbitration by a nationally recognized independent
accounting firm mutually agreed upon by KPMG Peat Marwick and
PricewaterhouseCoopers (the "Independent Accountant"). Each party shall
represent and warrant to the other that such Independent Accountant is not the
independent auditor of such party or the ultimate parent of such party.
(ii) The Independent Accountant shall as promptly as practicable
make a determination of the items in dispute, which determination shall be final
and binding upon the parties and shall be enforceable by a court of competent
jurisdiction. The cost of the Independent Accountant shall be borne equally by
AWS and Buyer.
3.8 Treatment of Adjustments. The parties agree to treat any adjustments
made pursuant to Sections 3.5 or 3.6 as adjustments to the Transaction
Consideration for United States federal, state, local and foreign tax purposes.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE AWS PARTIES
Each AWS Party jointly represents and warrants to the Buyer Parties that,
except as disclosed in the AWS Parties' Disclosure Schedule:
4.1 Organization of the AWS Parties; Authority. Each AWS Party is a
corporation duly incorporated, validly existing and in good standing under the
laws of the state of its incorporation, with the corporate power and authority
to enter into this Agreement and the Related Agreements to which it is a party
and to perform its obligations hereunder and thereunder.
4.2 Authorization; No Breach. The execution, delivery and performance of
this Agreement, the Related Agreements to which it is a party and the
consummation of the Transactions have been duly authorized by all required
corporate action on the part of each AWS Party. This Agreement has been duly
executed and delivered by each AWS Party and constitutes, and as of the Closing
the Related Agreements to which it is a party will be duly executed and
delivered by it and upon execution and delivery each such Related Agreement
shall constitute, a valid and binding obligation of such AWS Party, enforceable
in accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and other similar laws of general
applicability relating to or affecting creditors' rights and to general
equitable principles. The execution and delivery by each AWS Party of this
Agreement and the Related Agreements to which
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it is a party and the consummation of the Transactions will not, except to the
extent that would not have or be likely to have a Material Adverse Effect on the
Company or any AWS Party, (a) violate any provision of any applicable law, rule
or regulation, (b) violate any order, judgment or decree applicable to any AWS
Party the Company, or Claircom Licensee, (c) conflict with, or result in a
breach of or default under any term or condition of the Certificate of
Incorporation or By-laws of any AWS Party or Claircom Licensee, or (d) violate,
conflict with, result in a breach of any provision of, or constitute a default
(or an event that, with notice or lapse of time or both, would constitute a
default) under, any agreement to which any AWS Party, the Company or Claircom
Licensee, is bound or result in the termination or in a right of termination or
cancellation of, or accelerate the performance required by, any note, bond,
mortgage, indenture, deed of trust, lease, contract or agreement to which the
interest of any AWS Party in the Company or any of the Company's or Claircom
Licensee's properties may be bound or to which it is a party or result in the
creation of any Encumbrance upon any of the properties of the Company or
Claircom Licensee.
4.3 Organization of the Company. The Company, Claircom Licensee and, to
the knowledge of AWS, each Company Subsidiary, other than CDM, is a corporation
duly incorporated, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, with the corporate power and authority to own
or lease the properties and assets it now owns or holds under lease and to carry
on its business as currently conducted. The Company, Claircom Licensee and, to
the knowledge of AWS, each Company Subsidiary, other than CDM, is duly qualified
to do business and is in good standing in jurisdictions where the nature of the
properties owned or leased by it or the activities conducted by it make such
qualification necessary, except where the failure to be so qualified and in good
standing would not have a Material Adverse Effect on the Company. The copies of
the Certificate of Incorporation and By-laws of the Company and each Company
Subsidiary heretofore delivered to Buyer are complete and correct copies of such
instruments as presently in effect. All minute books of the Company and each
Company Subsidiary have been made available to the Buyer Parties.
4.4 Capitalization of the Company. The authorized capital stock of the
Company consists of 50,000 authorized shares of common stock, par value $.01 per
share ("Common Stock"), 12,536 shares of which are issued and outstanding and
constitute the Shares, and 50,000 authorized shares of Preferred Stock, par
value of $.01 ("Preferred Stock"), none of which are issued and outstanding. All
of the Shares have been duly authorized and validly issued and are fully paid
and nonassessable. The Company has no other equity securities of any kind
authorized or outstanding, no outstanding securities convertible into or
exchangeable for or carrying the right to acquire any equity security of the
Company and no outstanding options, warrants or other agreements or commitments
under which the Company is obligated to issue any additional equity securities
of the Company.
4.5 Share Ownership. ATG is the record and beneficial owner of good and
valid title to the Shares set forth opposite its name on Schedule 3.2 and it
owns such Shares free and clear of any liens, encumbrances, equities or claims.
At the Closing, ATG shall transfer to Buyer good and
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valid title to such Shares. The Company is the record and beneficial owner of
good and valid title to all of the issued and outstanding shares of capital
stock of Claircom Licensee.
4.6 Governmental Consents. (a) Except as set forth in this Agreement, no
consent, license, approval, waiver, expiration of waiting period or
authorization of, or registration or declaration with, any Governmental Body is
required to be obtained or made by the AWS Parties, Claircom Licensee or the
Company in connection with the execution, delivery and performance of this
Agreement, the Related Agreements and the consummation of the Transactions.
(b) Claircom Licensee is the authorized and legal holder of all FCC
Licenses that are necessary for the Company to conduct its business in the
manner in which it is currently being conducted. Schedule 4.6(b) sets forth an
accurate and complete list of all FCC Licenses held by Claircom Licensee and
copies of such Licenses. All FCC Licenses listed on Schedule 4.6(b) are in full
force and effect. Claircom Licensee is in substantial compliance in all material
respects with all terms and conditions of, and all of its respective obligations
under, the FCC Licenses. Except for proceedings affecting the air-to-ground
radiotelephone service business generally, there is no pending, nor to the
knowledge of the AWS Parties or the Company, threatened proceeding or complaint
against Claircom Licensee that questions or contests the validity of, or seeks
the revocation, nonrenewal or suspension of, any FCC License listed on Schedule
4.6(b), or that seeks the imposition of any condition, administrative sanction,
modification or amendment with respect thereto which might reasonably result in
a Material Adverse Effect on the Company. To the knowledge of the AWS Parties
and the Company, there is no fact that would reasonably be expected to
disqualify the AWS Parties from obtaining the approval of the FCC to consummate
the Transactions.
(c) To the knowledge of AWS, ACHI and AirOne Canada Communications are in
substantial compliance in all material respects with all terms and conditions
of, and all of its obligations under, the Licenses. To the knowledge of the AWS
Parties or the Company, there is no pending or threatened proceeding or
complaint against Cantel, ACHI or AirOne Canada Communications that questions or
contests the validity of, or seeks the revocation, nonrenewal or suspension of,
any License listed on Schedule 4.6(c), or that seeks the imposition of any
condition, administrative sanction, modification or amendment with respect
thereto which might reasonably result in a Material Adverse Effect on ACHI.
There is no fact that, to the knowledge of the AWS Parties and the Company,
would reasonably be expected to disqualify any of Cantel, ACHI and AirOne Canada
Communications from obtaining the approval of the applicable Governmental Body
to consummate the Transactions and the transactions contemplated by the AirOne
Canada Letter Agreement.
(d) CDM is the authorized and legal holder of all Licenses that are
necessary for the Company to conduct its business in Mexico in the manner in
which it is currently being conducted. Schedule 4.6(d) sets forth an accurate
and complete list of all Licenses held by CDM and copies of such Licenses. All
Licenses listed on Schedule 4.6(d) are in full force and effect. To the
knowledge of the AWS Parties or the Company, there is no pending or threatened
proceeding or complaint
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against CDM that questions or contests the validity of, or seeks the revocation,
nonrenewal or suspension of, any License listed on Schedule 4.6(d), or that
seeks the imposition of any condition, administrative sanction, modification or
amendment with respect thereto which might reasonably result in a Material
Adverse Effect on the Company or CDM. There is no fact that, to the knowledge of
the AWS Parties and the Company, would reasonably be expected to disqualify CDM
from obtaining the approval of the applicable Government Body, if any, to
consummate the Transactions.
4.7 Third Party Consents and Approvals. The execution, delivery and
performance of this Agreement and the consummation of the Transactions by the
AWS Parties and the Company do not require the consent or approval of any third
party, except such consents and approvals which have been obtained or the
failure of which to obtain would not have, or be likely to have, a Material
Adverse Effect. The execution, delivery and performance of this Agreement, and
the consummation of the Transactions, by the AWS Parties or the Company do not
require the consent or approval of any party to a Significant Contract.
4.8 Financial Matters. (a) The Company has delivered to the Buyer Parties
the audited financial statements of the Company for the fiscal year ended
December 31, 1997, together with the notes to such financial statements
(collectively, the "1997 Financial Statements"). The audited balance sheet
included in the 1997 Financial Statements fairly presents, in all material
respects, the financial position of the Company as of its date and the audited
statement of operations included in the 1997 Financial Statements fairly
presents, in all material respects, the results of operations of the Company for
the period set forth therein, in each case in accordance with GAAP consistently
applied.
(b) The Company has also delivered to the Buyer Parties financial
statements with information for the nine-month period ended September 30, 1998
of the Company (the "Interim 1998 Financial Statements") and such nine-month
financial statements present fairly, in all material respects, in accordance
with GAAP, consistently applied, the financial condition and results of
operations of the Company as of and for the period ended September 30, 1998,
subject to the information in the notes contained therein.
4.9 Absence of Certain Changes. Since September 30, 1998 there have been
no changes in the business, assets or liabilities of the Company which
individually or in the aggregate have had, or are likely to have, a Material
Adverse Effect on the Company, other than changes of a general economic nature.
Since September 30, 1998, (a) the business of the Company has been operated in
the ordinary course of business consistent with past practice, (b) the Company
has not has entered into, or agreed to enter into, any transaction not in the
ordinary course of business and (c) the Company has not made any changes in its
accounting principles or practices.
4.10 Real Property. The Company does not have fee ownership of any real
property. The leases (the "Leases") of all real property leased by the Company
("Leased Property") are in full force and effect. The Company enjoys peaceful
and undisturbed possession under each such Lease and is not in default in any
material respect under any of such Leases and, to the Knowledge of the
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AWS Parties, no condition exists which with notice or lapse of time or both
would constitute such a default thereunder and the AWS Parties are not aware of
any default in any material respect by any other party to any such Lease. True
and correct copies of all material Leases and subleases have heretofore been
made available to the Buyer Parties. There are no consents required for any
material Lease to be in full force and effect following the sale of the Shares
and consummation of the Transactions. No condemnation, expropriation, eminent
domain or similar proceeding is pending or, to the Knowledge of the AWS Parties,
contemplated with respect to any of such Leased Property.
4.11 Compliance with Law. The Company has been, within the past three
years, and is presently in compliance with all Laws (other than the
Communications Act of 1934, as amended, and the rules and regulations
thereunder), except for such noncompliance with any of the foregoing as would
not individually or in the aggregate have, or be likely to have, a Material
Adverse Effect on the Company. The Company is presently in substantial
compliance in all material respects with the Communications Act of 1934, as
amended, and the rules, regulations and policies of the FCC promulgated
thereunder, except for such noncompliance with any of the foregoing as would not
individually or in the aggregate have, or be likely to have, a Material Adverse
Effect on the Company.
4.12 Tax Matters. (a) Except as would not have or be likely to have a
Material Adverse Effect on the Company, (i) all Returns that are required to be
filed by or with respect to the Company through the Closing Date have been or
will be duly filed and were accurate in all material respects; (ii) all Taxes
due with respect to the Returns referred to in clause (i) have been or will be
paid in full or are accrued on the most recent balance sheet of the Company
delivered to Buyer under this Agreement; (iii) no issues that have been raised
by the relevant taxing authority in connection with the examination of any of
the Returns referred to in clause (i) are currently pending; (iv) no waivers of
statutes of limitation have been given by or requested with respect to any Taxes
of the Company; and (v) there are no Encumbrances with respect to Taxes, other
than Encumbrances for Taxes not yet due and payable.
(b) No Tax is required to be withheld pursuant to Section 1445 of the
Code as a result of the transfer contemplated by this Agreement.
(c) As a result of Buyer's purchase of the Shares, neither the Company
nor Buyer will be obligated to make a payment to an individual that would be an
"excess parachute payment" to a "disqualified individual", as those terms are
defined in Section 28OG of the Code, without regard to whether such payment is
reasonable compensation for personal services performed or to be performed in
the future.
4.13 Litigation. There is no Litigation pending or, to the knowledge of
the AWS Parties, threatened against the AWS Parties, Claircom Licensee or the
Company which would impair the ability of the AWS Parties or the Company to
consummate the Transactions. Schedule 4.13 sets forth all Litigation pending
against the Company. There is no Litigation pending or, to the knowledge of the
AWS Parties, threatened against the Company or Claircom Licensee which
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Litigation, if adversely determined, would have, or be likely to have, a
Material Adverse Effect on the Company.
4.14 Contracts. As of the date hereof, Schedule 4.14 sets forth all
commitments or agreements to be performed by the Company after the Closing Date
pursuant to which the Company is obligated to expend or has any right to receive
more than $3,000,000 in any calendar year and which is not subject to
cancellation by the Company upon less than twelve (12) months' notice or without
penalty (collectively, the "Significant Contracts"). To the knowledge of the AWS
Parties, (i) the Company has complied in all material respects with the
provisions of all the Significant Contracts to which it is a party and is not in
material default thereunder, (ii) no other party to a Significant Contract is in
material default thereunder, and (iii) there are no events or conditions
currently existing that are reasonably likely to lead to a material default.
True, correct and complete copies of all Significant Contracts have heretofore
been made available by the Company to Buyer. The Company is not contractually
restricted from carrying out its business anywhere in the world.
4.15 ERISA; Employee Benefits.
(a) Schedule 4.15(a) contains a complete and accurate list of all
existing bonus, incentive, deferred compensation, pension, retirement,
profit-sharing, thrift, savings, employee stock ownership, stock bonus, stock
purchase, restricted stock, stock option, severance, welfare and fringe benefit
plans, employment or severance agreements and all similar practices, policies
and arrangements in which any employee or former employee (the "Employees"),
consultant or former consultant (the "Consultants") or director or former
director (the "Directors") of the Company or any of its subsidiaries
participates or to which any such Employees, Consultants or Directors are a
party (the "Benefit Plans"). Except as set forth on Schedule 4.15(a), none of
the Benefit Plans are maintained or sponsored by the Company or its subsidiaries
and, except as indicated on Schedule 4.15(a), each Benefit Plan is maintained
and sponsored by AWS. Neither the Company nor any of its subsidiaries has any
commitment to create any additional material Benefit Plan or to modify or change
any existing Benefit Plan in any material respect. With respect to each Benefit
Plan, if applicable, the Company has provided or made available to Buyer true
and complete copies of existing: (A) 401(k) Plan documents and amendments
thereto; (B) the most recent summary plan description; (C) most recent
determination letter issued by the IRS.
(b) None of the Company or any of its subsidiaries has contributed, or
been obligated to contribute, to any Benefit Plans which are "multiemployer
plans" (within the meaning of Sections 3(37) or 4001(a)(3) of ERISA) under
Subtitle E of ERISA at any time since September 26, 1980. All Benefit Plans have
been maintained and operated in material accordance with their terms and are in
substantial compliance with applicable law, including but not limited to ERISA
and the Code. No Benefit Plan is a "defined benefit plan" for purposes of ERISA
("Pension Plan"). Each Benefit Plan which is intended to be qualified under
Section 401(a) of the Code has received a favorable determination letter from
the Internal Revenue Service for "TRA" (as defined in Rev. Proc.
93-39)(including a determination that the related trust under such Benefit Plan
is exempt from tax under Section 501(a) of the Code), and the AWS Parties are
not aware of any circumstances likely
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to result in revocation of any such favorable determination letter. There is no
material pending or, to the Knowledge of the AWS Parties or the Company,
threatened Litigation relating to the Benefit Plans.
(c) No liability under Title IV of ERISA has been or is expected to be
incurred by the Company or any of its subsidiaries with respect to any ongoing,
frozen or terminated "single-employer plan", within the meaning of Section
4001(a)(15) of ERISA, currently or formerly maintained by either of them, or the
single-employer plan of any entity (an "ERISA Affiliate") which is considered
one employer with the Company under Section 4001 of ERISA or Section 414 of the
Code (an "ERISA Affiliate Plan").
(d) To the knowledge of the AWS Parties or the Company, all contributions
required to be made under the terms of any Benefit Plan or ERISA Affiliate Plan
have been timely made. All contributions accrued through the Closing Date with
respect to any Benefit Plan will be paid by the Company prior to the Closing
Date or will be properly recorded on the Closing Statement.
(e) To the knowledge of the AWS Parties or the Company, the Company has
no obligations for retiree health and life benefits under any Benefit Plan. To
the best knowledge of the AWS Parties or the Company, there has been no
communication to Employees by the Company or any of its subsidiaries that would
reasonably be expected to promise or guarantee such Employees retiree health or
life insurance or other retiree death benefits on a permanent basis.
(f) To the knowledge of the AWS Parties or the Company, all Benefit Plans
covering foreign Employees comply in all material respects with applicable local
law. The Company has no material unfunded liabilities with respect to any
Pension Plan which covers foreign Employees.
(g) To the knowledge of the AWS Parties or the Company, neither the
Company nor any ERISA Affiliate has engaged in a transaction with respect to any
Benefit Plan that, assuming the taxable period of such transaction expired as of
the date hereof, could subject the Company or any of its subsidiaries to a tax
or penalty imposed by either Section 4975 of the Code or Section 502(i) of
ERISA.
(h) Except as disclosed on Schedule 4.15(h), as a result, directly or
indirectly, of the Transactions (including, without limitation, as a result of
any termination of employment prior to or following the Closing Date), none of
the Buyer, the Company or any of their respective subsidiaries will be obligated
to make a payment that would be characterized as an "excess parachute payment"
to an individual who is a "disqualified individual" (as such terms are defined
in Section 280G of the Code), without regard to whether such payment is
reasonable compensation for personal services performed or to be performed in
the future.
(i) Except as set forth in Schedule 4.15(a), the consummation of the
Transactions will not (a) entitle any Employee, Consultant or Director of the
Company to severance pay, unemployment compensation or any other payment, or (b)
accelerate the time of payment or vesting,
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or increase the amount of compensation due any such Employee, Consultant or
Director. Except as set forth in Schedule 4.15(a), within the 24 month period
preceding the date hereof, the Company has taken no action to entitle, and the
Company does not owe, any employee or officer of the Company any severance pay
or other compensation that has not been paid.
4.16 Labor Difficulties. (a) There is no unfair labor practice complaint
against the Company pending, or to the Knowledge of the AWS Parties, threatened
before the National Labor Relations Board or other similar forum or, to the
Knowledge of the AWS Parties, efforts to organize with respect to employees of
the Company, (b) there is not now, nor has there been within the last three
years, any labor strike, slowdown or stoppage actually pending or threatened
against the Company and (c) no grievance which would have, or be likely to have,
a Material Adverse Effect on the Company nor any arbitration proceeding arising
out of or under collective bargaining agreements is pending and no claim
therefor exists. True and complete copies of all collective bargaining or union
contracts or agreements to which the Company is a party have been provided to
the Buyer Parties.
4.17 Insurance. The Company has made available to the Buyer Parties true
and complete copies of all insurance policies relating to the business or assets
of the Company, such policies remain in full force and effect as of the date
hereof and no notice of cancellation or termination has been received with
respect to any such policy.
4.18 Environmental Matters. The Company currently holds all material
permits, licenses, registrations and other governmental authorizations
(including exemptions, waivers, and the like) and financial assurance required
under Environmental Laws for the Company to operate its business as currently
conducted ("Environmental Permits"). All Environmental Permits are listed on
Schedule 4.18 hereto. The Company has not been notified by any Governmental Body
that (a) any Environmental Permit may be modified, suspended or revoked or (b)
any Environmental Permit cannot be renewed, transferred, provided or otherwise
obtained by the Company in the ordinary course of business.
4.19 Undisclosed Liabilities. The Company has no liabilities or
obligations, except to the extent such liabilities or obligations (a) are fully
reflected as liabilities or reserved for on the balance sheet contained in the
Interim 1998 Financial Statements, (b) have been incurred in the ordinary course
of business by the Company (which course of business does not include the
incurrence of liabilities for the failure to perform its obligations under
contracts), or (c) are disclosed in any Schedule hereto, or (with respect to any
of the representations and warranties set forth in this Article 4) are not
required to be disclosed on a Schedule to make such representation and warranty
true and would not, in the aggregate, result in a liability to the Company in
excess of $500,000.
4.20 Books and Records. The Company has made and will make available for
inspection by Buyer the books of account, relating to the business of the
Company and Claircom Licensee. The books of account of the Company reflect the
transactions and other matters required to be set forth under GAAP applied on a
consistent basis.
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4.21 Customers and Suppliers.
(a) To the best knowledge of the AWS Parties, no material supplier or
customer of the Company has canceled or otherwise terminated, or made any
written threat to the Company or to any of its Affiliates to cancel or otherwise
terminate, for any reason, including the consummation of the Transactions, its
relationship with the Company.
(b) Schedule 4.21 to this Agreement lists the material customers of the
Company, including each customer which represented in excess of 3% of Company
Revenue during the year ended December 31, 1997 or the nine months ended
September 30, 1998.
4.22 Projections. The financial projections provided by the Company to
Buyer were prepared by AWS and the Company in good faith and are based on
reasonable assumptions, in each case as of the date provided.
4.23 Year 2000 Compliance. All reprogramming or replacements required to
permit the proper functioning (but only to the extent that such proper
functioning would otherwise by impaired by the occurrence of the year 2000), in
and following the year 2000, of the computer systems and other equipment
containing embedded microchips of the Company and each Company Subsidiary, and
the testing of all such systems and equipment, as so reprogrammed, are expected
to be completed by September 30, 1999, except to the extent that the failure to
complete such reprogramming, replacements and/or testing by such time could not
reasonably be expected to result in a Material Adverse Effect on the Company.
The cost to the Company and the Company Subsidiaries of such reprogramming,
replacements and/or testing and of the reasonably foreseeable consequences of
year 2000 to the Company and the Company Subsidiaries is not anticipated to
result in a Material Adverse Effect on the Company.
4.24 Related Party Transactions. Except for such transactions which, in
the aggregate, have not had, and are not likely to have, a Material Adverse
Effect on the Company, all transactions between the Company and any other
operations of AWS or any Affiliate of AWS reflected in the 1997 Financial
Statements or the Interim 1998 Financial Statements or entered into since the
date of the Interim 1998 Financial Statements were (a) entered into in the
ordinary course of business consistent with past practice and (b) on terms no
less favorable to the Company than those that could be obtained in a comparable
arm's length transaction between two entities that were not Affiliates.
4.25 Currency. The Company conducts all of its business in, and receives
all payments due to it in, United States dollars.
4.26 Accuracy of Copies. The copies of documents furnished by the Company
to the Buyer Parties pursuant to the terms of this Agreement are complete and
accurate copies of such documents.
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4.27 Brokers and Intermediaries. Neither the AWS Parties nor the Company
has employed any broker, finder, consultant or intermediary in connection with
the Transactions that would be entitled to a broker's, finder's or similar fee
or commission in connection therewith.
4.28 Penalties. If the Company performs in accordance with the 1999
Projected Installation Schedule attached to Schedule X, no penalties could be
imposed under any airline contract as a result of the Company's failure to
install or deliver equipment in a timely manner.
4.29 LIMITATION. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES CONTAINED
IN THIS AGREEMENT, THE AWS PARTIES MAKE NO OTHER REPRESENTATIONS OR WARRANTIES,
AND HEREBY DISCLAIM ANY OTHER REPRESENTATIONS OR WARRANTIES, WHETHER MADE BY THE
AWS PARTIES OR THE COMPANY OR ANY OF THEIR OFFICERS, DIRECTORS, EMPLOYEES,
AGENTS OR REPRESENTATIVES, WITH RESPECT TO THE EXECUTION AND DELIVERY OF THIS
AGREEMENT, THE TRANSACTIONS, OR THE BUSINESS OF THE COMPANY, NOTWITHSTANDING THE
DELIVERY OR DISCLOSURE TO BUYER OR ITS REPRESENTATIVES OF ANY DOCUMENTATION OR
OTHER INFORMATION WITH RESPECT TO ANY ONE OR MORE OF THE FOREGOING.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF CANTEL
Cantel represents and warrants to the Buyer Parties that, except as
disclosed in its Disclosure Schedule:
5.1 Organization of Cantel; Authority. It is a corporation duly
incorporated, validly existing and in good standing under the laws of Canada,
with the corporate power and authority to enter into this Agreement and to
perform its obligations hereunder.
5.2 Authorization; No Breach. The execution, delivery and performance of
this Agreement and the consummation of the Transactions have been duly
authorized by all required corporate action on the part of Cantel. This
Agreement has been duly executed and delivered by Cantel and constitutes a valid
and binding obligation of Cantel, enforceable against Cantel in accordance with
its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other similar laws of general applicability
relating to or affecting creditors, rights and to general equitable principles.
The execution and delivery by Cantel of this Agreement and the consummation of
the transactions contemplated hereby will not, except to the extent that would
not have, or be likely to have, a Material Adverse Effect on the Company or
Cantel, (a) violate any provision of any applicable law, rule or regulation, (b)
violate any order, judgment or decree applicable to Cantel, (c) conflict with,
or result in a breach of or default under any term or condition
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of the Certificate of Incorporation or By-laws of Cantel or (d) violate,
conflict with, result in a breach of any provision of, or constitute a default
(or an event that, with notice or lapse of time or both, would constitute a
default) under, or result in the termination or in a right of termination or
cancellation of, or accelerate the performance required by, any note, bond,
mortgage, indenture, deed of trust, lease, contract or agreement to which Cantel
or any of its properties may be bound or to which it is a party or result in the
creation of any Encumbrance upon any of the properties of the Company.
5.3 Share Ownership. Cantel is the record and beneficial owner of good
and valid title to the Shares set forth opposite its name on Schedule 3.2 and it
owns such Shares free and clear of any liens or encumbrances. At the Closing, it
shall transfer to Buyer, good and valid title to such Shares.
5.4 Governmental Consents. No consent, license, approval, waiver,
expiration of waiting period or authorization of, or registration or declaration
with, any Governmental Body is required to be obtained or made by Cantel in
connection with the execution, delivery and performance by Cantel of this
Agreement, the Transactions and the AirOne Canada Letter Agreement.
5.5 Third Party Consents and Approvals. The execution, delivery and
performance of this Agreement and the consummation of the Transactions by Cantel
do not require the consent or approval of any third party, except such consents
and approvals which have been obtained or the failure of which to obtain would
not have, or be likely to have, a Material Adverse Effect on the Company or
ACHI.
5.6 Litigation. There is no Litigation pending against Cantel or, to the
knowledge of Cantel, threatened against Cantel which would materially impair the
ability of Cantel to consummate the Transactions.
5.7 Brokers and Intermediaries. Cantel has not employed any broker,
finder, consultant or intermediary in connection with the Transactions that
would be entitled to a broker's, finder's or similar fee or commission in
connection therewith.
5.8 Canadian Organization, Authority and Licenses. Each of Cantel, ACHI
and AirOne Canada Communications is a corporation duly incorporated, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, with the corporate power and authority to own or lease the
properties and assets it now owns or holds under lease and to carry on its
business as currently conducted. Each of ACHI and ACHI's subsidiaries is duly
qualified to do business and is in good standing in jurisdictions where the
nature of the properties owned or leased by it or the activities conducted by it
make such qualification necessary, except where the failure to be so qualified
and in good standing would not have a Material Adverse Effect on ACHI. AirOne
Canada Communications is the authorized and legal holder of all Licenses that
are necessary for ACHI and the Company to conduct their respective businesses in
Canada in the manner in which
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they currently are being conducted. Schedule 5.8 sets forth an accurate and
complete list of all Licenses held by AirOne Canada Communications and copies of
such Licenses. All Licenses listed on Schedule 5.8 are in full force and effect.
AirOne Canada Communications is in substantial compliance in all material
respects with all terms and conditions of, and all of its obligations under, the
Licenses. There is no pending, or to the knowledge of Cantel, threatened
proceeding or complaint against Cantel, ACHI or AirOne Canada Communications
that questions or contests the validity of, or seeks the revocation, nonrenewal
or suspension of, any License listed on Schedule 5.8, or that seeks the
imposition of any condition, administrative sanction, modification or amendment
with respect thereto which might reasonably result in a Material Adverse Effect
on the Company or ACHI. There is no fact that would reasonably be expected to
disqualify Cantel, ACHI, AirOne Canada Communications from obtaining the
approval of the applicable Governmental Body to consummate the Transactions and
the transactions contemplated by the AirOne Canada Letter Agreement.
5.9 LIMITATION. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES CONTAINED
IN THIS AGREEMENT, CANTEL MAKES NO OTHER REPRESENTATIONS OR WARRANTIES, AND
HEREBY DISCLAIMS ANY OTHER REPRESENTATIONS OR WARRANTIES, WHETHER MADE BY CANTEL
OR THE COMPANY OR ANY OF THEIR OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR
REPRESENTATIVES, WITH RESPECT TO THE EXECUTION AND DELIVERY OF THIS AGREEMENT,
THE TRANSACTIONS, OR THE BUSINESS OF THE COMPANY, NOTWITHSTANDING THE DELIVERY
OR DISCLOSURE TO BUYER OR ITS REPRESENTATIVES OF ANY DOCUMENTATION OR OTHER
INFORMATION WITH RESPECT TO ANY ONE OR MORE OF THE FOREGOING.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF BUYER
Each Buyer Party represents and warrants to the Seller Parties that,
except as disclosed in the Buyer Parties' Disclosure Schedule:
6.1 Organization of Buyer; Authority. (a) Buyer is a corporation duly
incorporated, validly existing and in good standing under the laws of the state
of its incorporation, with the corporate power and authority to enter into this
Agreement and the Related Agreements to which it is a party and to perform its
obligations hereunder and thereunder.
(b) Iridium is a limited liability company duly organized, validly
existing and in good standing under the laws of Delaware, with the limited
liability company power and authority to enter into this Agreement and the
Iridium Guarantee and to perform its obligations hereunder and thereunder.
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6.2 Authorization; No Breach. The execution, delivery and performance of
this Agreement and the Related Agreements to which it is a party, and the
consummation of the Transactions have been duly authorized by all requisite
limited liability company or corporate action on the part of each Buyer Party.
This Agreement has been duly executed and delivered by each Buyer Party, and as
of the Closing the Related Agreements to which it is a party will be duly
executed and delivered by it and upon execution and delivery each Related
Agreement shall constitute a valid and binding obligation of each Buyer Party,
enforceable against Buyer in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors rights and to general
equitable principles. The execution and delivery by each Buyer Party of this
Agreement and the Related Agreements to which it is a party and the consummation
of the Transactions will not, except to the extent that would not have, or be
likely to have, a Material Adverse Effect on such Buyer Party, (a) violate any
provision of any applicable law, rule or regulation, (b) violate any order,
judgment or decree applicable to any Buyer Party, (c) conflict with, or result
in a breach of or default under, any term or condition of the Certificate of
Incorporation, By-laws or limited liability company agreement of any Buyer Party
or (d) violate, conflict with, result in a breach of any provision of, or
constitute a default (or an event that, with notice or lapse of time or both,
would constitute a default) under, or result in the termination or in a right of
termination or cancellation of, or accelerate the performance required by, any
note, bond, mortgage, indenture, deed of trust, lease, contract or agreement to
which any Buyer Party or any of their properties may be bound or to which it is
a party.
6.3 Financial Capability. On the Closing Date, Buyer shall have
sufficient funds available to comply with Buyer's obligations to consummate the
Transactions.
6.4 Consents. Except as set forth in this Agreement, no consent, license,
approval, waiver, expiration of waiting period or authorization of, or
registration or declaration with, any Governmental Body is required to be
obtained or made by any Buyer Party in connection with the execution, delivery
and performance of this Agreement, the Related Agreements and the consummation
of the Transactions.
6.5 Third Party Consents and Approvals. The execution, delivery and
performance of this Agreement and the Related Agreements, and the consummation
of the Transactions by any Buyer Party, do not require the consent or approval
of any third party, except such consents and approvals which have been obtained
or the failure of which to obtain would not have, or be likely to have, a
Material Adverse Effect on the Company.
6.6 Litigation. There is no Litigation pending or, to knowledge of any
Buyer Party, threatened against any Buyer Party which would materially impair
the ability of the Buyer Parties to consummate the Transactions.
6.7 Acquisition of Shares. The Shares are being acquired by Buyer for its
own account solely for the purpose of investment without the view to, or for
sale in connection with, any distribution thereof in violation of federal or
state securities laws and with no present intention of
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distributing or reselling any part thereof. Buyer shall not so distribute or
resell any Shares in violation of any such law; provided, Buyer may, subject to
its compliance with Section 8.5, transfer Shares to an Affiliate.
6.8 Maintenance of Corporate Existence. The Buyer intends to preserve its
corporate existence and has no present intention of transferring or assigning
any of the Shares or all or substantially all the assets of the Company (by
sale, merger or otherwise) to a non-corporate entity.
6.9 Compliance and Qualifications. To the knowledge of the Buyer Parties,
there is no fact concerning the Buyer Parties that has not been disclosed in
writing by them to AWS that would be reasonably likely (a) to render the Buyer
Parties legally, technically or financially unqualified under the Communications
Act of 1934, as amended, and the rules and regulations of the FCC thereunder, to
hold the FCC Licenses described in Schedule 4.6(b) or the Shares of the Company
or (b) to cause the acquisition of the Shares by the Buyer Parties to disqualify
Claircom Licensee from holding the FCC Licenses described in Schedule 4.6(b).
6.10 Brokers and Intermediaries. Buyer has not employed any broker,
finder, advisor or intermediary in connection with the Transactions which would
be entitled to a broker's, finder's or similar fee or commission in connection
therewith or upon the consummation thereof.
6.11 LIMITATION. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES CONTAINED
IN THIS AGREEMENT, THE BUYER PARTIES MAKE NO OTHER REPRESENTATIONS OR
WARRANTIES, AND HEREBY DISCLAIM ANY OTHER REPRESENTATIONS OR WARRANTIES MADE BY
BUYER OR ANY OF THEIR OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR REPRESENTATIVES,
WITH RESPECT TO THE EXECUTION AND DELIVERY OF THIS AGREEMENT OR THE
TRANSACTIONS, NOTWITHSTANDING THE DELIVERY OR DISCLOSURE TO SELLERS OR THEIR
REPRESENTATIVES OF ANY DOCUMENTATION OR OTHER INFORMATION WITH RESPECT TO ANY
ONE OR MORE OF THE FOREGOING.
ARTICLE 7
CERTAIN PRE-CLOSING COVENANTS AND
AGREEMENTS OF THE PARTIES
7.1 Access and Information. (a) Between the date of this Agreement and
the Closing Date, AWS shall, and shall cause the Company to, (i) give Buyer and
its authorized representatives full and complete access to all properties,
personnel, facilities and offices of the Company and to the books and records of
the Company (and permit Buyer to make copies thereof), (ii) permit Buyer to make
inspections thereof and (iii) cause its officers and employees to furnish Buyer
with such financial information and operating data and other information with
respect to the business and properties of the Company, and to discuss with Buyer
and its authorized representatives the affairs
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of the Company, all as Buyer may from time to time reasonably request for the
purposes of this Agreement during normal business hours and with reasonable
notice to the AWS Parties and the Company. Notwithstanding the foregoing, Buyer
acknowledges that with respect to certain confidential information, any
disclosure to be made to Buyer may be subject to the rights of third parties and
Buyer may be required to execute certain non-disclosure agreements and agrees to
execute any such agreements, or other documentation in connection therewith,
prior to being provided with or being given access to such information. In the
event that a Closing does not occur hereunder, the Buyer Parties agree that, for
a period of one year from the date the Agreement is terminated, neither the
Buyer Parties nor an affiliate or subsidiary of a Buyer Party shall directly or
indirectly induce any employee of the Company to terminate employment with the
Company and shall not directly or indirectly employ or offer employment to any
person who is or was employed by the Company unless such person shall have
ceased to be employed by the Company for a period of at least six months.
(b) Other than as permitted by the Nondisclosure Agreements, between the
date of this Agreement and the Closing Date, the Buyer Parties shall and shall
cause their officers and directors and shall use reasonable efforts to cause all
their other employees, auditors, attorneys, consultants, advisors and agents, to
hold in strict confidence, unless compelled to disclose by judicial or
administrative process or, in the opinion of its counsel, by other requirements
of law, all confidential information of the AWS Parties or the Company furnished
to the Buyer Parties by AWS or the Company or their respective representatives
in connection with the Transactions and shall not release or disclose such
information to any other Person, except their auditors, attorneys, financial
advisors and other consultants, agents and advisors in connection with the
consummation of the Transactions, provided that if the Buyer Parties are
compelled to disclose any such information, the Buyer Parties shall provide AWS
with written notice as soon as reasonably practicable in order to provide AWS
with an opportunity to prevent or limit such disclosure and the Buyer Parties
shall provide reasonable cooperation to AWS in such regard. If the Closing does
not occur (i) such confidence shall be maintained by the Buyer Parties, and the
Buyer Parties shall cause their officers and directors and shall use reasonable
efforts to cause such other Persons to maintain such confidence, except to the
extent such information comes otherwise into the public domain and (ii) upon the
request of AWS or the Company, the Buyer Parties shall promptly return to AWS or
the Company any written materials remaining in its possession, which materials
it has received from AWS, the Company or their respective representatives,
together with all copies thereof in the possession of the Buyer Parties, and
shall certify to AWS that they have returned all such materials.
7.2 Conduct of the Business. Except as expressly permitted by this
Agreement, between the date of this Agreement and the Closing Date, AWS shall
cause the Company to conduct the Company's business only in the ordinary course
in substantially the same manner as heretofore conducted, and use all its
reasonable efforts to preserve intact its present business organization,
maintain its properties in good operating condition and repair, keep available
the services of its present officers and employees and preserve in all material
respects its present business relationships and goodwill (including, but not
limited to, its relationship with Cantel), provided that AWS shall not be
responsible for changes in the Company's business resulting from the
Transactions or from
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any actions taken or anticipated to be taken by Buyer following the Closing
Date, including, without limitation, any adverse reaction thereto from any
employee, customer or supplier, provided further that AWS shall use reasonable
efforts to inform Iridium of any such adverse reaction of which it or the
Company becomes aware that would have a material impact on the conduct of the
business. In addition, except as otherwise expressly provided in this Agreement
or as consented to by Buyer (such consent not to be unreasonably withheld),
between the date of this Agreement and the Closing Date, AWS shall not permit
the Company to:
(a) amend its Certificate of Incorporation or By-laws;
(b) purchase, redeem, issue, sell or otherwise acquire or dispose of,
either directly or indirectly, any of the Shares, or reclassify, split or
otherwise change any of the Shares or grant or enter into any options, warrants,
puts or calls or other rights to purchase, sell or convert any obligation into
any of the Shares;
(c) (i) make or grant any increase in the compensation (whether salary,
commission, bonus, benefits (retirement, severance or other) or other direct or
indirect remuneration) of Employees or enter into any contract or other binding
commitment in respect of any such increase, or (ii) amend, adopt or terminate
any 401(k) or health and welfare plan covering Employees in any way that
exclusively affects Employees of the Company, or (iii) enter into any
negotiations in respect of any collective bargaining agreement covering
Employees, except in each case in the ordinary course of business (including but
not limited to (in the case of clause (i)) increases in connection with employee
annual reviews provided the aggregate of all such increases does not exceed 5%
of the aggregate employee compensation paid by the Company), as provided in
Schedule 7.2(c) or as required by Law, or except to the extent that Seller has
agreed to bear the cost thereof; provided that, in addition to increases
otherwise permitted under this paragraph (c), the Company may further increase
the compensation of any Employee provided the aggregate amount of all such
increases pursuant to this proviso payable in any one quarter shall not exceed
$200,000;
(d) sell, assign, transfer, pledge, encumber or otherwise dispose of or
agree to sell, assign, transfer, pledge, encumber or otherwise dispose of any of
its assets or properties in excess of $350,000 in the aggregate or otherwise
material to the business or any other material right, except in each case in the
ordinary course of business;
(e) enter into any material contract, Eligible Fleet Agreement, or any
material amendment, supplement or waiver in respect of any material contract,
other than in the ordinary course of business;
(f) agree to pay any legal, accounting, brokerage, taxes or other
expenses in connection with this Agreement or the Transactions except any such
expenses or obligations to be paid in full prior to the Closing Date;
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(g) cancel or compromise any debt or claim, or waive or release any
material right, other than adjustments in the ordinary course of business for
goods and services sold and received which, in the aggregate, are not material
and the settlement of any pending or threatened litigation listed on Schedule
4.13;
(h) make or commit to make any capital expenditures or capital additions
or improvements in excess of an aggregate of $2 million, other than pursuant to
capital expenditure commitments disclosed on Schedule 3.6(c)(ii); or
(i) incur any indebtedness in excess of $500,000, except for the
incurrence of (i) indebtedness (excluding accounts payable incurred in the
ordinary course of business) pursuant to the Notes or (ii) indebtedness to AWS
or its affiliates that will be discharged prior to Closing or included in the
Adjusted Working Capital Statement;
(j) enter into any transaction that would have a material adverse effect
on Buyer's ability to conduct the business of the Company as currently
conducted; or
(k) agree or otherwise commit, whether in writing or otherwise, to do, or
take any action or omit to take any action that would result in, any of the
foregoing.
7.3 AWS Commitments.
(a) AWS shall perform, or cause ATG to perform, the obligations to be
performed by ATG under this Agreement and any Related Agreements to which ATG is
a party.
(b) At the Closing, AWS shall cause the Company to have cash, cash
equivalents and other Liquid Investments having a value at least equal to the
Cash Amount.
(c) Other than the intercompany account evidenced by the Notes and the
intercompany accounts listed on Schedule 7.3(c), AWS shall cause all
intercompany accounts of the Company owed to AWS or any of its Affiliates (other
than the Company) to be settled in full at or prior to the Closing. Any amount
owing by the Company not so settled shall be canceled at the Closing. With
respect to the foregoing, prior to the Closing the Company shall deliver to ATG
the Notes.
7.4 Insurance. AWS shall cause the Company to keep in effect until the
Closing all policies of insurance in effect as of the date hereof maintained by
AWS or the Company insuring the assets, properties, business or operations of
the Company. Upon Closing, coverage for the Company under all AT&T Corp.'s
insurance policies, as well as all of the Company's coverage under
insurance-related surety bonds, will cease as of that date. The Buyer Parties
are responsible for the uninsured portion of all claims (including any
deductible) for damages made against the Company before, on, or after the
closing date, unless the Seller Parties are responsible therefor pursuant to
Section 12.1.
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7.5 Iridium Commitments.
(a) Iridium shall perform, or cause Buyer to perform, the obligations to
be performed by Buyer under this Agreement and any Related Agreements to which
Buyer is a party.
(b) The Buyer Parties agree to use their reasonable efforts to cause the
AWS Parties and their Affiliates (other than the Company) to be released at the
Closing or as soon as practicable thereafter from any obligations or liabilities
under any guarantees in respect of any obligation of the Company with respect to
Significant Contracts (the "Guarantees"). If the Closing occurs, the Buyer
Parties agree to indemnify and hold harmless the AWS Parties and their
Affiliates (other than the Company) from any loss arising out of any such
unreleased Guarantees in connection with the failure of the Company or any of
its Affiliates to perform any obligations thereunder after the Closing.
(c) Upon the reasonable request of AWS or any party to a Significant
Contract (a "Significant Party") in connection with obtaining a consent to the
Transaction from a Significant Party, the Buyer Parties agree to guarantee the
performance of the Company thereunder or provide other reasonable assurances to
such Significant Party in connection therewith.
7.6 Announcements. Between the date of this Agreement and the Closing
Date, except to the extent required by applicable law or stock exchange rule or
regulation or in response to inquiries made from any Governmental Body: (a)
neither the Buyer Parties nor the Seller Parties shall, and none of them shall
permit any Affiliate to, issue any press release or public announcement of any
kind concerning, or otherwise publicly disclose, the Transactions without the
consent of the other; and in the event any such public announcement, release or
disclosure is required by law, the parties shall consult prior to the making
thereof and use their best efforts to agree upon a mutually satisfactory text;
(b) subject to Section 7.1 hereof, the Buyer Parties shall not, and shall not
permit their representatives, consultants and agents to, communicate with
customers, suppliers or employees of the Company with respect to the
Transactions or the business of the Company without the prior written consent of
AWS not to be unreasonably withheld; and (c) the Buyer Parties shall not (except
with respect to the HSR Act and the applications filed with the FCC and the FAA
pursuant to Section 7.7 hereof) communicate with any government officials with
respect to the Company or Sellers or the Transactions without the prior consent
of Sellers, which consent shall not be unreasonably withheld.
7.7 Further Actions. (a) The Seller Parties, the Company and the Buyer
Parties agree to use best efforts to take all actions and to do all things
necessary, proper or advisable to consummate the Transactions, including,
without limitation, to obtain or cause to be obtained all consents of third
parties (including without limitation consents of the FAA and other Governmental
Bodies) necessary to be obtained by any of them in order to consummate the
Transactions.
(b) As promptly as practicable, Buyer and Sellers shall file with the
Federal Trade Commission and the Antitrust Division of the United States
Department of Justice pursuant to the
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HSR Act all requisite documents and notifications (if any) in connection with
this Agreement and the Transactions. Buyer and Sellers shall coordinate and
cooperate with each other in exchanging such information and providing such
reasonable assistance as the other may require to comply with the HSR Act.
(c) In addition to the filing required by the HSR Act, Sellers and Buyer
shall, and AWS shall cause the Company to, (i) file with the FCC and any other
applicable Governmental Bodies (including, but not limited to the FAA) the
applications and related documents required to be filed by such Governmental
Bodies (and prosecute diligently any such applications, including providing such
information as such Governmental Bodies may reasonably request) in order to
consummate the Transactions, (ii) cooperate with the other as may reasonably be
requested in connection with the foregoing, and (iii) otherwise use their best
efforts to obtain promptly the requested consent and approval of the
applications by the FCC and any other applicable Governmental Bodies. The AWS
Parties and the Buyer Parties shall each pay one half of all FCC filing or other
Governmental Body filing or grant fees in connection with the applications
requesting its consent to the consummation of the Transactions.
(d) All license, regulatory and other fees assessed by any Governmental
Body shall be apportioned between AWS and Buyer based on number of days in the
assessment period prior to and after the Closing Date, respectively, except that
each party shall pay the portion of any fee, assessments or charge imposed on
the basis of gross receipts or gross revenue, including but not limited to
universal service charges, to the extent due on the gross receipts or gross
revenue earned by the Company while controlled by the party.
(e) At all times prior to the Closing, AWS and the Company shall promptly
notify Buyer in writing of any fact, condition, event or occurrence that comes
to the attention of AWS or the Company that is reasonably likely to result in
the failure of any of the conditions contained in Section 9 to be satisfied,
promptly upon either of them becoming aware of the same.
(f) Between the date of this Agreement and the Closing Date, AWS shall
cause the Company to use the Company's best efforts to (a) maintain (and to the
extent not currently enjoyed by the Company, obtain) all licenses, permits,
registrations, consents, approvals or authorizations necessary to conduct the
Company's businesses in the manner in which they are currently operated in
Mexico and Canada (the "Foreign Licenses") and (b) comply with the Foreign
Licenses as well as all applicable legal, regulatory or other governmental
requirements applicable to the Company's businesses as currently operated in
Mexico and Canada and, to the extent that ACHI, CDM or the Mexican or Canadian
operations are not currently in compliance with the Foreign Licenses or any
applicable Law, bring ACHI, CDM and such operations into compliance, except in
each case where such failure (individually or in the aggregate) does not, and is
not reasonably expected to, have a Material Adverse Effect on CDM or ACHI.
Notwithstanding the foregoing and any other provision of this Agreement creating
a comparable obligation with respect to the Foreign Licenses, the Company
Subsidiaries, the Company Subsidiaries holding such Foreign Licenses and
compliance with applicable legal, regulatory or other governmental requirements,
none of the Company, the
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Company Subsidiaries, Sellers or any affiliates of Sellers shall be required to
take any action that, in their good faith judgment, they would not have taken
with respect to the Foreign Licenses, the Company's business relating thereto,
the Company Subsidiaries holding such Foreign Licenses or compliance with
applicable legal, regulatory or other governmental requirements (i) in the
prudent conduct of the Company's business and (ii) absent the Transactions
contemplated by this Agreement.
7.8 Expenses. All costs and expenses incurred in connection with this
Agreement and the Transactions (including fees and disbursements of financial
advisors, accountants and attorneys and any brokers or finders), shall be paid
(a) by each Seller, if such costs or expenses are incurred by or on behalf of
such Seller or the Company and (b) by Buyer, if such costs or expenses are
incurred by or on behalf of Buyer, provided that Buyer shall be liable for all
sales, filing, recordation, transfer and similar taxes arising from or
associated with the sale and transfer of the Shares.
7.9 Advertising. Between the date of this Agreement and the Closing Date,
AWS shall cause the Company to arrange such advertisements and promotions as
Iridium may reasonably request from time to time to promote the Company's
services to be provided by Iridium after Closing (including without limitation,
print advertisements in in-flight magazines) provided that (a) Iridium shall
reimburse the Company for any related out-of-pocket expenses promptly upon the
Company's request (such request to attach the underlying invoices); (b) the
Company is not required to incur related out-of-pocket expenses in excess of
$500,000.00, (c) the Company is not required to arrange such advertisements or
promotions as may be reasonably objected to by the Company's counsel, Akin,
Gump, Strauss, Hauer & Feld L.L.P., on regulatory grounds and (d) any such
request shall have been approved by AWS, such approval not to be unreasonably
withheld (it being agreed that it shall be reasonable for AWS to withhold
approval of any advertisement or promotion that could be adverse to the
interests of AWS and its Affiliates).
7.10 Certain Liabilities. On or prior to the Closing Date, AWS and the
Company shall procure the release of the Company from any and all liabilities
payable to AT&T Corp. or any of its affiliates outstanding on the Closing Date
unless such liabilities are reflected on the Adjusted Working Capital Statement.
7.11 Canadian Service Marks. (a) At or prior to the Closing, AWS and
Cantel shall terminate the rights of AirOne Canada to use any trademark, service
mark, trade name, trade dress or other indicia of origin owned by AWS or Cantel
or their respective affiliates as well as any composite marks based thereon (the
"Service Marks"), and (b) neither Cantel nor Buyer Parties shall permit AirOne
Canada to use the Service Marks from and after the Closing, provided that Buyer
and AirOne Canada may continue to use such Service Marks provided they shall
remove such Service Marks from any equipment or manufacturing materials
(including but not limited to handsets and other telecommunications equipment on
board customer aircraft) as soon as practical but in no event later than six (6)
months after the Closing.
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7.12 Certain Working Capital Matters. (a) All accounts receivable, both
billed and unbilled, and other debts due and to be included in the calculation
of Adjusted Working Capital pursuant to Schedule X shall, at the time of such
calculation, represent bona fide indebtedness incurred by the applicable account
debtors and shall have arisen in the ordinary course of the Company's business.
All allowances for doubtful accounts reflected in such calculation shall be made
in accordance with the Company's past practices except that in no event shall
accounts receivable that are more than 270 days delinquent in payment be
included in such calculation, and, to the knowledge of AWS and the Company, no
account receivable shall be subject to a pledge in favor of any third party.
(b) Any liabilities payable to AT&T Corp. or any of its affiliates that
are included on the Adjusted Working Capital Statement shall represent valid
payables the amounts of which are fixed and not subject to change.
(c) The revised installation schedule to be attached to the Adjusted
Working Capital Statement shall be prepared by AWS in good faith and based on
reasonable assumptions.
7.13 AirOne Canada Letter Agreement. Each of the Buyer Parties and each
of the Seller Parties shall use its best efforts to satisfy, or cause the
satisfaction of, the condition set forth in Sections 9.9 and 10.9 as soon as is
reasonably possible.
ARTICLE 8
OTHER COVENANTS AND AGREEMENTS OF THE PARTIES
8.1 Employee Matters. (a) AWS has previously delivered to Buyer a
document that lists separately each current employee of the Company and each
such employee's name, job title, current salary and any other compensation items
(e.g., bonus, allowances, etc.), years of service and the current status of each
such employee (e.g., whether the employee is active, on short-term disability,
on leave of absence, etc.). Such document shall be updated by AWS fifteen (15)
days prior to the scheduled Closing Date and a final list of employees of the
Company as of the Closing Date ("Final List") shall be provided by AWS to Buyer
as soon as practicable (but in no event later than 7 days following the Closing
Date). For purposes of this Agreement, "Company Employee" shall refer to each
employee of the Company as of the Closing Date as set forth on the Final List.
(b) Effective as of the Closing Date, Buyer shall cause the Company to
continue to employ each employee of the Company at the same base rate of pay and
each employee of the Company shall be eligible for bonuses on substantially the
same basis as are provided to similarly situated employees of Buyer.
(c) Buyer shall either cause the Company to maintain in effect, for a
period of twelve months following the Closing Date, all severance pay plans in
effect for the benefit of employees of
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the Company immediately prior to the Closing Date or establish and maintain a
severance pay plan for all employees of the Company which provides severance
benefits equal to or greater than the severance pay plans in existence
immediately prior to the Closing Date.
(d) Except as specifically required in paragraphs (c), (f) and (g) of
this Section 8.1, nothing in this Agreement shall limit the ability of the
Company following the Closing Date to amend or terminate any Benefit Plan.
(e) The AWS Parties shall retain all liabilities with respect to benefits
accrued and claims incurred with respect to all Company Employees under any
Benefit Plan (with the exception of liabilities with respect to accrued sick or
vacation benefits which shall become a liability of the Buyer) as of the last
moment of the day before the Closing Date, including short-term disability
benefits for individuals who are receiving short-term disability benefits prior
to the Closing Date. Except as otherwise provided in this Agreement, as of the
last moment of the Closing Date, all Company Employees shall cease to
participate as active employees in or accrue benefits under the Benefit Plans.
Thereafter, neither Buyer nor any of its Affiliates shall assume nor shall any
Company Employee be entitled to participate in any of the Benefit Plans, except
to the extent such plans provide by their terms for participation after the
Closing Date or as otherwise required by law. Sellers shall be responsible for
providing any continuation coverage required pursuant to Section 4980B of the
Code as the result of any "qualifying event" (within the meaning of Section
4980B(f)(3) of the Code) occurring with respect to any Company Employee or any
spouse or dependent thereof on or prior to the Closing Date.
(f) Immediately after Closing, all Company Employees shall be eligible to
participate in the pension, savings, profit sharing, health and welfare benefit
plans, programs and practices of Buyer generally applicable to other similarly
situated employees of Buyer. Buyer agrees that all Company Employees and
dependents who participated in the AWS group health and welfare plans prior to
Closing shall be covered by Buyer's health and welfare plans immediately after
Closing. Buyer further agrees that it shall not materially adversely change such
plans, programs and practices for the one-year period following the Closing
Date. All employees of the Company shall be eligible to authorize a direct roll
over of their account balances in the AT&T Wireless Services 401(k) Retirement
Plan to the defined contribution plan maintained by Buyer.
(g) Buyer shall recognize, from and after the Closing Date, each Company
Employee's service, as set forth on Schedule 8.1(a) of this Agreement, for
purposes of determining eligibility to participate in and vesting, and, if
applicable, eligibility to commence retirement benefits (including any early
retirement subsidies), but not benefit accruals, under any qualified pension,
savings, or profit-sharing plans in which Company Employees may participate, or
such other qualified pension or profit-sharing plans maintained by Buyer or
established on or after the Closing Date in which Company Employees participate,
and for purposes of determining eligibility to participate in and the schedule
of benefits provided by any group health plans, vacation and other paid time off
plans and policies, severance, sick pay, disability and other welfare benefit
plans established or maintained by Buyer or its Affiliate on or after the
Closing Date; provided, however,
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that until December 31, 1999, each Company Employee shall be entitled to at
least the amount of vacation, sick leave, personal days and similar time off for
which they are eligible (and which remains unused) under the AWS Parties'
policies in effect immediately prior to the Closing Date, and for all subsequent
years, shall be entitled to the amount of vacation and sick leave as determined
under the sick leave, vacation and paid time off policy of Buyer or the Company,
as the case may, based on such Company Employee's service recognized pursuant to
this Section 8.1(g).
(h) Neither the AWS Parties nor their Affiliates shall have any
liabilities or obligations with respect to benefits accrued and claims incurred
under any such plans, or any other plans sponsored, maintained or contributed to
by Buyer for or in respect of any Company Employee, after the end of the day
before the Closing Date.
(i) For purposes of determining whether any Company Employee or his or
her covered dependents have satisfied any required co-payments, annual
deductibles and out-of-pocket maximums from and after the Closing under the
terms of the Company's or Buyer's or its Affiliate's group health plan for the
calendar year in which the Closing occurs, Company Employees and their covered
dependents shall be credited with the amount of deductibles and co-payments made
by, or on behalf of, such Company Employees and their covered dependents under
the AWS Parties' group health plan for such year.
(j) With respect to flexible spending arrangements in which Company
Employees participate, to the extent permitted under ERISA or the Code, the AWS
Parties shall continue to apply amounts credited to the accounts of Company
Employees for covered medical expenses to the extent that such expenses are
incurred on or before the Closing Date and with respect to dependent care
expenses to the extent such expenses are incurred on or before December 31 of
the year in which the Closing Date occurs.
8.2 Access to Books and Records.
(a) Access. On and after the Closing Date, Buyer shall cause the Company
to give to the Sellers and their representatives such access as Sellers may
reasonably request to the properties, books, records and employees of the
Company relating to any period ending on or before the Closing Date, for
purposes including but not limited to (i) preparing any Tax Return and financial
statements and responding to Tax audits relating to the Company, or (ii)
investigating, preparing the defense or prosecution of, prosecuting or defending
any litigation proceeding, or investigation pending, threatened or anticipated
by or against the Company or any of the Sellers, except in an action between the
parties hereto; provided that (x) the normal conduct of the business of the
Company shall not be disrupted thereby and (y) in the event of any litigation or
threatened litigation between the parties, the foregoing shall in no event be,
or be deemed to be, a waiver by a party of any right to assert the
attorney-client privilege or other applicable privilege. Subject to the
foregoing, such access shall include, without limitation, assuring the presence
of a party's former employees as witnesses at depositions, hearings or trials.
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(b) Maintenance of Records. For a period of six years after the Closing
Date, Buyer shall cause the Company to maintain the books and records of the
Company in existence as of the Closing Date. In the event AWS provides the Buyer
or the Company with a written request to be provided with such books and
records, prior to the end of such six year period, Buyer shall cause the Company
to refrain from disposing of any such books or records covering periods prior to
the Closing Date, and shall (at AWS' expense) provide such books and records to
AWS instead of disposing thereof.
8.3 Tax Matters.
(a) Liability for Taxes.
(i) Except for the amount of Taxes described in clause (A), (B)
or (C) of this clause (i) that is deducted in calculating the Final Working
Capital in accordance with Schedule X, the AWS Parties shall be liable for and
indemnify Buyer or the Company as the case may be, for all Taxes (A) imposed on
the Company, or for which the Company may otherwise be liable, for any taxable
year or period that ends on or before the Closing Date and, with respect to any
portion of a taxable year or period beginning before and ending after the
Closing Date ("Split Period"), the portion of such Split Period ending on and
including the Closing Date, (B) for which the Company is held liable as a member
of any combined, consolidated or unitary group of which the Sellers or any of
its Affiliates (other than the Company) is or was a member pursuant to any
federal, state, local or foreign law with respect to Taxes or (C) imposed as a
result of the parties making an election pursuant to Section 338(h)(10) of the
Code (including any similar election or inability to make such an election under
any state or local statute corresponding to federal laws).
(ii) The Company shall be liable for and Buyer shall indemnify
Sellers for all Taxes imposed on Sellers with respect to the Company for any
taxable year or period that begins after the Closing Date and, with respect to a
Split Period, the portion of such Split Period beginning after the Closing Date.
(b) Taxes for Short Taxable Year. For purposes of paragraph (a), whenever
it is necessary to determine the liability for Taxes of the Company for a
portion of a Split Period, the determination of the Taxes for the portion of the
Split Period ending on, and the portion of the Split Period beginning after, the
Closing Date, shall be determined by assuming that the Company had a taxable
year or period that ended at the close of the Closing Date, except that any such
Tax imposed annually based on ownership of assets on a particular date shall be
prorated to the period to and including the Closing Date and the period
thereafter.
(c) Tax Refunds. Sellers shall be entitled to any refund of any Taxes,
including interest paid thereon, if any, net of income taxes due thereon, with
respect to periods ending on or before the Closing Date. AWS shall have the
right to determine whether any claim for refund for such Taxes shall be made on
behalf of Sellers by the Company. If AWS elects to make a claim for refund, the
Buyer Parties and the Company shall cooperate fully in connection therewith.
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Notwithstanding the foregoing, Sellers shall not be entitled make any claim for
refund of Taxes which would adversely affect the liability for Taxes of Buyer or
the Company for any period after the Closing Date to any extent (including, but
not limited to, the imposition of income tax deficiencies, the reduction of
asset basis or cost adjustments, the lengthening of any amortization or
depreciation periods, the denial of amortization or depreciation deductions, or
the reduction of loss or credit carryforwards) without the prior written consent
of Buyer. Such consent shall not be unreasonably withheld, and shall not be
necessary to the extent that Sellers have indemnified Buyer against the effects
of any such settlement. Sellers shall reimburse Buyer and the Company for
reasonable out-of-pocket expenses incurred in providing such cooperation.
(d) Coordination. Without the prior written consent of Sellers (which
consent may not be unreasonably withheld and shall not be necessary to the
extent that Buyer has indemnified the Sellers against the effects of any such
election or filing), neither Buyer, the Company, nor any Affiliate of Buyer
shall (i) make any election or (ii) file any amended Tax Return or propose or
agree to any adjustment of any item with the Internal Revenue Service or any
other taxing authority with respect to any tax period ending on, before or
including the Closing Date that would have the effect of increasing the
liability for any Taxes or reducing any Tax benefit of Sellers or the Company.
(e) Section 338(h)(10) Election.
(i) Buyer and Sellers shall take all steps necessary to make a
timely election under Section 338(h)(10) of the Code (and any comparable
election under state or foreign tax law) with respect to Buyer's acquisition of
the Shares from Sellers. Buyer and Sellers shall cooperate fully with each other
in the making of such election.
(ii) In particular and not by way of limitation, in order to
effect such election, Buyer and Sellers shall jointly execute necessary copies
of Internal Revenue Service Form 8023 and all attachments required to be filed
therewith pursuant to applicable Treasury Regulations. Accordingly, Buyer and
Sellers agree, on the Closing Date, to (x) enter into a Purchase Price
Allocation Agreement (the "Allocation Agreement") providing for the allocation
of the purchase price for tax purposes (as determined therein, the "Tax Purchase
Price") consistent with the provisions of Section 338 of the Code and Treasury
Regulations thereunder and (y) cooperate in the preparation of Form 8023 for
timely filing in each of their respective federal income Tax Returns. For
purposes of the Allocation Agreement, the allocation of the Tax Purchase Price
to the assets of the Company shall be as agreed to by Buyer and AWS, or, if
Buyer and AWS cannot agree, then the assets on which agreement has not been
reached shall be subject to an appraisal by an independent appraiser which shall
be acceptable to both parties. The amount of the Tax Purchase Price allocated to
such assets so appraised shall be equal to their respective appraised fair
market values. Unless otherwise prohibited by law, all foreign, federal, state
and local income Tax returns filed by Buyer and the Sellers shall be filed
consistently with the allocations made pursuant to the Allocation Agreement.
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(f) Tax Returns. Sellers shall file or cause to be filed when due,
including extensions thereof, all Returns that are required to be filed with
respect to the Company for taxable years or periods ending on or before the
Closing Date and shall pay any Taxes due in respect of such Returns, and Buyer
shall file or cause to be filed when due all Returns that are required to be
filed with respect to the Company for taxable years or periods beginning and
ending after the Closing Date and shall pay any Taxes due in respect of such
Returns. Sellers and Buyer shall jointly prepare and Buyer shall file or cause
to be filed all Returns that are required to be filed with respect to the
Company for any Split Period taxable year, and AWS and Buyer agree to negotiate
and resolve in good faith any issue arising as a result of the preparation of
such Tax Return. In the event the parties are unable to resolve any dispute
prior to thirty (30) Business Days before the due date of such Tax Return,
including extensions thereof, if a request for extension has been timely filed,
AWS and Buyer shall jointly select a public accounting firm with nationally
recognized tax expertise ("Tax Arbitrator") to resolve the dispute. If the Tax
Arbitrator has not resolved the dispute within five (5) Business Days prior to
the due date (including extensions) for the filing of the Tax Return in
question, then Buyer may file such Tax Return in accordance with its position on
such disputed issue without AWS' consent. Notwithstanding the filing of such Tax
Return, the Tax Arbitrator shall make a determination with respect to any
disputed issue, and the amount of Taxes for which Sellers are responsible
pursuant to Section 8.3(b) shall be as determined by the Tax Arbitrator. The
fees and expenses of the Tax Arbitrator shall be shared equally by Buyer and
Sellers. Not later than five (5) Business Days before the due date for the
payment of Taxes with respect to such Tax Return or (ii) in the event of a
dispute five (5) Business Days after notice to Sellers of resolution thereof,
Sellers shall pay to Buyer an amount equal to the Taxes allocable to Sellers
pursuant to Section 8.3(b). Notwithstanding the foregoing, in the case of a
dispute, Sellers shall pay to Buyer not later than five (5) Business Days before
the due date for the payment of Taxes with respect to such Tax Return, the
amount of Taxes that Sellers reasonably believe at such time is properly
allocable to Sellers pursuant to Section 8.3(b). No payment pursuant to this
Section shall exempt Sellers from their indemnification obligations pursuant to
this Agreement if the amount of Taxes as ultimately determined (on audit or
otherwise) for the periods covered by such Tax Returns that are the
responsibility of Sellers exceeds the amount of Sellers' payment under this
Section.
(g) Contest Provisions. Whenever Buyer receives a notice of any pending
or threatened audit or assessment for any taxable period for which Sellers are
or may be liable under this Agreement, Buyer shall promptly inform Sellers in
writing, provided that failure to comply with this provision shall not affect
Buyer's right to indemnification hereunder. AWS shall have the right to control,
at its own cost, any resulting proceedings and to determine whether and when to
settle any such claim, assessment or dispute to the extent such proceedings or
determinations affect the amount of Taxes for which Sellers are liable under
this Agreement. Notwithstanding the foregoing, Sellers shall not be entitled to
settle, either administratively or after the commencement of litigation, any
claim for Taxes which would adversely affect the liability for Taxes of Buyer or
the Company for any period after the Closing Date to any extent (including, but
not limited to, the imposition of income tax deficiencies, the reduction of
asset basis or cost adjustments, the lengthening of any amortization or
depreciation periods, the denial of amortization or depreciation deductions, or
the reduction of loss or credit carryforwards) without the prior written consent
of Buyer. Such consent
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shall not be unreasonably withheld, and shall not be necessary to the extent
that Sellers have indemnified Buyer against the effects of any such settlement.
Whenever any taxing authority sends a notice of an audit, initiates an
examination of the Company or otherwise asserts a claim, makes an assessment or
disputes the amount of Taxes (i) for any taxable period for which Buyer is
liable under this Agreement or (ii) for any taxable period that involves an
issue that could potentially affect a taxable period for which Buyer is or may
be liable under this Agreement, Sellers shall promptly inform Buyer in writing,
and Buyer shall have the right to control, at its cost, any resulting
proceedings and to determine whether and when to settle any such claim,
assessment or dispute, except to the extent such proceedings affect the amount
of Taxes for which Sellers are liable under this Agreement.
(h) Termination of Tax Allocation Agreements. Any tax allocation or
sharing agreement or arrangement, whether or not written, that may have been
entered into by AWS and the Company shall be terminated as to the Company as of
the Closing Date, and no payments which are owed by or to the Company pursuant
thereto shall be made thereunder.
(i) Information to be Provided by Buyer. With respect to the taxable year
of Sellers ending on the last day of the most recent full tax year and the
period in tax year 1999 prior to and including the Closing Date, Buyer shall
promptly cause the Company to prepare and provide to Sellers a package of tax
information materials (the "Tax Package"), which shall be completed in
accordance with past practice including past practice as to providing the
information, schedules and work papers and as to the method of computation of
separate taxable income or other relevant measure of income of the Company.
Buyer shall cause the Tax Package for the portion of the taxable period ending
on the Closing Date to be delivered to Sellers within one hundred twenty (120)
days after the Closing Date.
(j) Assistance and Cooperation. Each of Buyer and Sellers shall provide
the other with such assistance as may reasonably be requested by each of them in
connection with the preparation of any Tax Return, any audit or other
examination by any taxing authority, or any judicial or administrative
proceedings relating to liability for Taxes, and each shall retain and provide
the other with any records or information which may be relevant to such Return,
audit or examination, proceedings or determination. Such assistance shall
include making employees available on a mutually convenient basis to provide
additional information and explanation of any material provided hereunder and
shall include providing copies of any relevant Tax Return and supporting work
schedules. The party requesting assistance hereunder shall reimburse the other
for reasonable expense incurred in providing such assistance. Without limiting
in any way the foregoing provisions of Section 8.3 or this Section 8.3(j), Buyer
hereby agrees that it shall retain, until the appropriate statutes of limitation
(including any extensions) expire, copies of all Tax Returns, supporting work
schedules and other records or information which it possesses and which may be
relevant to such returns of the Company for all taxable periods ending on or
prior to the Closing Date, and that such records shall be maintained until the
expiration of the applicable statute of limitations, including any extensions
thereto. Further, Buyer shall not destroy or otherwise dispose of such records
without first providing Seller with a reasonable opportunity to review and copy
such records.
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(k) Survival of Obligations. Notwithstanding any other provision of this
Agreement, the rights and obligations of the parties set forth in this Section
8.3 shall remain in effect without limitation as to time.
8.4 Contingent Payment. (a) In the event of a Sale Transaction (as
defined below) occurring between the Closing Date and the date of the
eighteen-month anniversary of the Closing Date (the "Value Period"), Buyer shall
pay to Sellers, in accordance with the following provisions of this Section 8.4,
an amount (the "Contingent Amount") equal to 80% of the positive difference, if
any, between the "Equity Sale Value" and the "Applicable Value" (as such terms
are defined below).
For the purposes of this Agreement, the following terms shall have the following
meanings:
"Sale Transaction" means any of the following, whether in one transaction
or in a series of transactions: (A) Buyer, or any of its Affiliates, transfers
or disposes of, directly or indirectly, 49% or more of the capital stock of the
Company, (B) the Company transfers or disposes of, directly or indirectly, 49%
or more (by value) of its assets (excluding sales of inventory and other assets
in the ordinary course of business), (C) the Company issues or sells any of its
capital stock to, or consolidates with or merges with or into, another Person or
enters into any other significant corporate transaction pursuant to which,
directly or indirectly, 49% or more of the aggregate value of the interests of
the Buyer, or any of its Affiliates, in the Company are transferred or disposed
of or (D) the Company, the Buyer or any of its Affiliates enters into a binding
agreement to consummate any such transaction, provided that (x) transfers or
dispositions to the present shareholders of Buyer, or any of its Affiliates, or
an entity of which more than 80% of the equity and voting power are owned
directly or indirectly by one or more of such Persons, shall not be deemed to be
transfers or dispositions constituting part of a Sale Transaction so long as the
provisions of the last sentence of paragraph (b) below are complied with and (y)
a merger, consolidation or business combination with an entity engaged in the
same business as the Company or a business related thereto, in which Buyer
receives equity in the surviving entity but not cash or securities of a class
registered under the Securities Exchange Act of 1934, as amended (or securities
or interests convertible into such securities), shall not be deemed a Sale
Transaction.
"Equity Sale Value" means the total value of the consideration paid or
distributed to the Company or to the Persons who are directly or indirectly
owners of the Company in the Sale Transaction in respect of the Company or its
assets, including, without limitation, cash consideration and in-kind
consideration, less fees and expenses attributable to the Sale Transaction
payable from the Company or such owners, as the case may be, to Persons that are
not Affiliates of Buyer or the Company, provided that in the case of a
transaction in which the consideration is paid to the Company, in order to
clarify the intent of the foregoing definition the parties agree that the value
of extraordinary distributions paid to direct or indirect owners of the Company
that have been financed by the incurrence of debt shall be considered to be
value paid or distributed in a Sale Transaction.
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"Applicable Value" means, with respect to a particular Sale Transaction
the product of (i) the Purchase Price plus the aggregate amount of all dividends
or other distributions (other than those in the form of additional capital stock
of the Company) made by the Company in respect of any shares of any class of
capital stock of the Company, whether in cash or property or obligations of the
Company and (ii) the percentage interest in the Company or the Company's assets
being transferred or disposed of directly or indirectly in such Sale
Transaction.
(b) Contemporaneously with the execution of a binding agreement with
respect to any Sale Transaction, Buyer and the Company shall notify Sellers
thereof, and shall furnish together with such notice a complete and correct copy
of such binding agreement, and Buyer and the Company shall promptly provide such
other information with respect thereto as may reasonably be requested by
Sellers. The Contingent Amount shall be payable to Sellers at the same time as
the consideration in the Sale Transaction is payable to the Company or the
Buyer, as the case may be, and in the same form or (at the option of the Buyer
or its Affiliates or the Company, as the case may be, upon at least thirty days'
prior notice to Sellers) in cash or equivalent value as determined in accordance
with paragraph (c) below, provided that payment of the Contingent Amount as
provided herein shall be made on the closing date of the Sale Transaction and as
a condition to the consummation thereof. In the event of any transfer or
disposition of all or a substantial portion of the assets held directly or
indirectly by the Company, or by Buyer or any of its Affiliates holding an
interest in the Company, that does not constitute a Sale Transaction (whether in
one transaction or a series of transactions), as a condition to such transfer or
disposition such transferee shall assume the obligations of the Company or Buyer
hereunder, as the case may be, and shall agree in writing to be bound by the
terms of this Section 8.4, such writing to be in form and substance satisfactory
to AWS.
(c) In the event that any Sale Transaction provides for the payment of
any non-cash consideration (including, without limitation, any deferred or
contingent consideration) then, for the purposes of determining the Contingent
Amount (if any) payable to Sellers pursuant to this Section 8.4, the amount of
such non-cash consideration shall be deemed equal to the fair market value of
such non-cash consideration as determined at least five (5) Business Days prior
to the closing date of such Sale Transaction by an investment banking firm of
recognized national standing (the "Appraiser") selected by Buyer (and having no
material relationship with Buyer) and reasonably satisfactory to AWS. If any
property (the "Other Assets") other than ownership in, or assets of, the
Company, are proposed to be transferred in connection with any Sale Transaction,
then, for purposes of determining the Contingent Amount (if any) payable to
Sellers pursuant to this Section 8.4 the consideration in the Sale Transaction
shall be deemed not to include any portion thereof allocable to such Other
Assets, such allocation to be determined (and delivered to the Company and the
Sellers) at least ten (10) Business Days prior to the closing date by the
Appraiser. All fees, costs and other expenses of the Appraiser pursuant to this
Section 8.4 shall be borne equally by Buyer and AWS.
8.5 Maintenance of Corporate Existence. Each of Buyer and Iridium agrees,
for a period of nine months after the Closing Date, it shall preserve the
corporate existence of Buyer, and
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shall not transfer any of the Shares or all or substantially all the assets of
the Company (by sale, merger or otherwise) (i) to a non-corporate entity or (ii)
any entity which does not agree to be bound by the restrictions applicable to
Buyer under this Section 8.5.
8.6 Confidentiality. Each of the Seller Parties agrees that following the
Closing Date it and its Affiliates shall and shall cause its respective officers
and directors and shall use reasonable efforts to cause all its other employees,
auditors, attorneys, consultants, advisers and agents to, hold in strict
confidence, unless compelled to disclose by judicial or administrative process
or by other requirements of law and after prior written notice to Buyer, all
confidential information of the Company in its respective possession and shall
not release or disclose such confidential information of the Company in its
respective possession to any other Person, except to its auditors, attorneys,
financial advisors and other consultants, agents and advisors in connection with
post-Closing matters hereunder or other matters as to which the Seller Parties
have retained obligations or liabilities hereunder; provided that the foregoing
obligations shall not apply to any such information which otherwise comes into
the public domain.
8.7 Further Assurances. Following the Closing, the Seller Parties and the
Buyer Parties shall, and shall cause each of their Affiliates to, from time to
time, execute and deliver such additional instruments, documents, conveyances or
assurances and take such other actions as shall be necessary, or otherwise
reasonably requested by the other party, to confirm and assure the rights and
obligations provided for in this Agreement and render effective the consummation
of the Transactions.
ARTICLE 9
CONDITIONS PRECEDENT OF SELLER PARTIES
The obligation of the Seller Parties to consummate the Transactions is
subject to the fulfillment of each of the following conditions prior to or at
the Closing:
9.1 Representations and Warranties. The representations and warranties of
the Buyer Parties contained in Article 6 shall be true in all material respects
at and as of the Closing Date, with the same force and effect as though made at
and as of the Closing Date, except for changes expressly contemplated by this
Agreement, and except to the extent that any representation or warranty is made
as of a specified date, in which case such representation or warranty shall be
true in all material respects as of such date.
9.2 Agreements. The Buyer Parties shall have performed and complied in
all material respects with all their undertakings and agreements required by
this Agreement to be performed or complied with by the Buyer Parties prior to or
at the Closing.
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9.3 Buyer Certificate. Sellers shall have been furnished with a
certificate of an authorized officer of each of the Buyer Parties, dated the
Closing Date, certifying to the effect that the conditions contained in Sections
9.1 and 9.2 have been fulfilled.
9.4 Compliance with Law. No Law, and no order or injunction of any
Governmental Body, shall be in effect which prohibits the consummation of the
Transactions.
9.5 Consents. All governmental authorizations, consents, approvals,
exemptions, or other actions required to consummate the Transactions (including,
without limitation, as required under the HSR Act) shall have been obtained and
shall be in full force and effect, without the imposition of any conditions not
reasonably acceptable to the Seller Parties. With respect to approval of the
FCC, the FCC Consent shall have become a Final Order and shall not contain any
Adverse Conditions with respect to the Company or the AWS Parties.
9.6 Opinion of Counsel to Buyer Parties. Sellers shall have received an
opinion or opinions from counsel to the Buyer Parties reasonably satisfactory to
AWS, dated the Closing Date and to the effect set forth in Exhibit F.
9.7 Release of Guarantees. AWS and its Affiliates (other than the
Company) shall have been released from their obligations or liabilities under
any Guarantees pursuant to documentation reasonably satisfactory in form and
substance to AWS.
9.8 Notes. The Notes shall have been executed and delivered to AWS by the
Company and the Notes and all of the Company's obligations thereunder shall be
in full force and effect. The Notes shall be dated the FCC Consent Date unless
the Closing occurs within fifteen days after the FCC Consent Date, in which case
the Notes shall be dated the Closing Date.
9.9 AirOne Canada Documentation. Cantel and Iridium shall have executed
and delivered the definitive documentation contemplated in that certain letter
agreement by and between Iridium and Cantel, dated as of December 22, 1998 (the
"AirOne Canada Letter Agreement").
ARTICLE 10
CONDITIONS PRECEDENT OF BUYER PARTIES
The obligation of the Buyer Parties to consummate the Transactions is
subject to the fulfillment of each of the following conditions prior to or at
the Closing:
10.1 Representations and Warranties. The representations and warranties
of the Seller Parties contained in Article 4 and Article 5 shall be true in all
material respects at and as of the Closing Date, with the same force and effect
as though made at and as of the Closing Date, except for changes expressly
contemplated by this Agreement, and except to the extent that any
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representation or warranty is made as of a specified date, in which case such
representation or warranty shall be true in all material respects as of such
date.
10.2 Agreements. Each of the AWS Parties shall have performed and
complied in all material respects with all of its undertakings and agreements
required by this Agreement to be performed or complied with by it prior to or at
the Closing. Cantel shall have performed and complied in all material respects
with all of its undertakings and agreements required by this Agreement to be
performed or complied with by it prior to or at the Closing.
10.3 No Material Adverse Change. There shall not have occurred and be
continuing any event, condition, situation or circumstance of any nature
whatsoever (other than changes of a general economic nature) that has or is
likely to have a Material Adverse Effect on the Company.
10.4 Sellers' Certificates. Buyer shall have been furnished with a
certificate of an authorized officer of (i) each of the AWS Parties dated the
Closing Date, certifying to the effect that the conditions contained in Sections
10.1, 10.2 and 10.3 have been fulfilled, and (ii) Cantel, certifying to the
effect that the conditions contained in Sections 10.1 and 10.2 have been
fulfilled.
10.5 Compliance with Law. No Law, and no order or injunction of any
Governmental Body, shall be in effect which prohibits the consummation of the
Transactions.
10.6 Consents. All governmental authorizations, consents, approvals,
exemptions, or other actions required to consummate the Transactions (including,
without limitation, as required under the HSR Act) shall have been obtained and
shall be in full force and effect, without the imposition of any conditions not
reasonably acceptable to Buyer. With respect to approval of the Federal
Communications Commission, the FCC Consent shall have become a Final Order and
shall not contain any Adverse Conditions with respect to the Company or the
Buyer Parties.
10.7 Opinions of Counsel to Seller Parties. Buyer shall have received
opinions from counsel reasonably satisfactory to Buyer, dated the Closing Date
and to the effect set forth in Exhibits G-1 to G-4.
10.8 FIRPTA Certificates.
(a) Buyer shall have received from ATG a certificate described in
Treasury Regulations Section 1.1445-2(b)(2)(iii)(B); and
(b) Cantel, within 30 days of the Closing Date, shall have procured from
the Company a statement described in Treasury Regulations Section 1.897-2(h) to
the effect that stock of the Company does not constitute a U.S. real property
interest under Section 897 of the Code, and shall have delivered such statement
to Buyer.
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10.9 AirOne Canada Documentation. Cantel and Iridium shall have executed
and delivered the definitive documentation contemplated in that certain letter
agreement by and between Iridium and Cantel, dated as of December 22, 1998 (the
"AirOne Canada Letter Agreement").
ARTICLE 11
SURVIVAL OF REPRESENTATIONS
AND WARRANTIES
11.1 Survival of Representations and Warranties. All representations and
warranties of the Seller Parties and the Buyer Parties included in this
Agreement shall survive until the first March 31 occurring after the one-year
anniversary of the Closing Date and shall thereafter expire except with respect
to breaches and violations theretofore specified in reasonable detail to the
Seller Parties by the Buyer Parties or to the Buyer Parties by the Seller
Parties, as the case may be, and except for the representations and warranties
contained in Sections 4.12 relating to Taxes and the first two sentences of
Section 4.13 relating to Litigation, which shall survive for the applicable
statute of limitations and the representations in Sections 4.5 and 5.3 which
shall survive indefinitely.
ARTICLE 12
INDEMNIFICATION
12.1 Indemnification of Buyer Parties. Subject to the terms and
conditions of this Article 12, each of AWS and ATG agrees to indemnify and hold
harmless the Buyer Parties and their successors and permitted assigns, the
Company and their respective Affiliates, on an after-tax basis, against and in
respect of any and all claims, demands, losses, damages, costs and reasonable
expenses, including, without limitation, reasonable legal fees and expenses
("Damages"), resulting or arising from (a) any failure by any Seller Party to
perform or otherwise fulfill or comply with any provision of this Agreement or
any Related Agreement, and (b) any breach or violation of any representation or
warranty of any Seller Party hereunder or under any Related Agreement (subject
to Section 11.1). AWS agrees to indemnify and hold harmless the Buyer Parties
and their successors and permitted assigns, the Company and their respective
Affiliates, on an after-tax basis, against and in respect of any and all Damages
resulting or arising from (x) any Taxes payable by the Company in respect of
periods ending on or prior to the Closing Date and (y) the pending litigation
described on Schedule 4.13. AWS shall be entitled to any recoveries whatsoever,
including, but not limited to damages, attorneys' fees and costs obtained by or
on behalf of the Company, in any order or judgment in or settlement of such
litigation, whether pursuant to counterclaims asserted by the Company or
otherwise. For greater certainty, the AWS Parties shall not be entitled to any
contribution from Cantel in respect of any amount the AWS Parties are required
to pay pursuant to this Section 12.1.
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12.2 Indemnification of Seller Parties. Subject to the terms and
conditions of this Article 12, each of the Buyer Parties agrees to indemnify and
hold harmless the Seller Parties and their respective successors and permitted
assigns and their respective Affiliates, on an after-tax basis, against and in
respect of any and all Damages resulting or arising from any of the following,
whether pursuant to a guarantee made to a Significant Party by a Seller or AWS
or otherwise: (a) any failure by any Buyer Party to perform or otherwise fulfill
or comply with any provision of this Agreement or any Related Agreement, (b) any
breach or violation of any representation or warranty of a Buyer Party hereunder
or under any Related Agreement and (c) all liabilities arising out of or
relating to the Company (except for such matters as Sellers are required to
indemnify the Buyer Parties pursuant to Section 12.1).
12.3 Claims. Any claim for indemnity under Section 12.1 or 12.2 shall be
made by written notice from the party seeking to be indemnified (the
"Indemnitee") to the party from which indemnification is sought (the
"Indemnifying Party") specifying in reasonable detail the basis of the claim.
When an Indemnitee seeking indemnification under Section 12.1 or 12.2 receives
notice of any claims made by third parties ("Third Party Claims") which is to be
the basis for a claim for indemnification hereunder, the Indemnitee shall give
written notice within a reasonable period thereof to the Indemnifying Party
reasonably indicating the nature of such claims and the basis thereof. Upon
notice from the Indemnitee, the Indemnifying Party may, but shall not be
required to, assume the defense of any such Third Party Claim, including its
compromise or settlement, and the Indemnifying Party shall pay all reasonable
costs and expenses thereof and shall be fully responsible for the outcome
thereof, provided, however, that (i) the Indemnifying Party shall not settle any
such claim without the Indemnitee's prior written consent (which consent shall
not be unreasonably withheld) unless the only remedy for such claim is monetary
damages which are paid in full by the Indemnifying Party and (ii) the
Indemnifying Party shall not, without the written consent of the Indemnitee,
settle or compromise any claim which does not include as an unconditional term
thereof the giving by the claimant or the plaintiff to Indemnitee, a release
from all liability in respect to such claim. In connection with any claim
involving any remedy other than monetary damages, the Indemnitee shall have the
right to be kept informed and be consulted in connection with the resolution of
such claim. Other than with respect to claims listed on Schedule 4.13 the
defense of which AWS has assumed, the Indemnifying Party shall give notice to
the Indemnitee as to its intention to assume the defense of any such Third Party
Claim within twenty (20) days after the date of receipt of the Indemnitee's
notice in respect of such Third Party Claim. If an Indemnifying Party does not,
within twenty (20) days after the Indemnitee's notice is given, give notice to
the Indemnitee of its assumption of the defense of the Third Party Claim, the
Indemnifying Party shall be deemed to have waived its rights to control the
defense thereof. If the Indemnitee assumes the defense of any Third Party Claim
because of the failure of the Indemnifying Party to do so in accordance with
this Section 12.3, the Indemnifying Party shall pay all reasonable costs and
expenses of such defense and shall be fully responsible for the outcome thereof.
The Indemnifying Party shall have no liability with respect to any compromise or
settlement thereof effected without its prior written consent, which consent
shall not be unreasonably withheld.
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12.4 Limitation of Liability. Each party to this Agreement shall have as
its sole and exclusive remedy resulting from the breach of any representation or
warranty made by the other party to this Agreement a claim for indemnity under
Sections 12.1 or 12.2 of this Agreement. Any claims by any Buyer Party or any
Seller Party for breach of any representation or warranty made hereunder shall
be subject to the following:
(a) with respect to Sections 12.1(b) and 12.2(b), the provisions for
indemnity shall be effective only to the extent that the aggregate amount of all
such claims for which a party is liable hereunder exceeds 0.50% of the
Transaction Consideration, in which case the Buyer Party, ATG or AWS, as the
case may be, shall be liable for all such amounts in excess thereof; provided,
that in no event shall Buyer, ATG or AWS, as the case may be, be liable for more
than an amount in the aggregate equal to 10.00% of the Transaction
Consideration; provided, further, that the foregoing limitations shall not apply
to the breach of any representation or warranty contained in Section 4.5 or
Section 5.3;
(b) In determining the amount of an indemnity on an after-tax basis, the
amount of any claim for indemnity hereunder shall be reduced to reflect any
actual tax savings received by the Indemnitee within three (3) years from the
Closing Date that result from the liability that gave rise to such indemnity;
and
(c) the amount of any claim for indemnity hereunder shall be reduced to
reflect any insurance proceeds recoverable by and paid to the Indemnitee
relating to such claim, provided that the foregoing reduction shall not be
applied if to do so would excuse any insurer from any obligation to cover any
loss.
12.5 Manner of Payment. In the discretion of Buyer, up to 60% of the
amount of any indemnification payment to be made hereunder by ATG or AWS may be
made by reduction in the outstanding principal amount of the Notes.
ARTICLE 13
TERMINATION
13.1 Grounds for Termination. This Agreement may be terminated at any
time prior to the Closing:
(a) by written agreement of Buyer and AWS;
(b) by AWS at any time during the 30 day period following February 28,
1999, unless the conditions contained in Sections 9.9 and 10.9 have been
satisfied or irrevocably waived by Cantel and the Buyer Parties;
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(c) by AWS, if the FCC Consent is not a Final Order, at any time after
the date that is 41 days after the FCC Consent Date until the date that is 70
days after the FCC Consent Date; and
(d) by either Buyer or AWS in writing without liability to the
terminating party or parties on account of such termination (provided the
terminating party is not otherwise in material default or breach of this
Agreement) if the Closing shall not have occurred on or prior to December 31,
1999.
13.2 Effect of Termination. Termination of this Agreement pursuant to
this Article 13 shall terminate all obligations of the parties hereto except as
provided below in this Section 13.2; provided, however, that (a) termination
pursuant to Section 13.1(d) shall not relieve a defaulting or breaching party
hereunder from any liability to the other party hereto resulting from the
default or breach hereunder of such defaulting or breaching party occurring
prior to the date of termination, and (b) the provisions of this Article 13, the
provisions set forth in Sections 7.8, 13.2, 14.1, 14.2, 14.3 and 14.9, and the
last sentence of Section 7.1(a), shall survive any such termination.
ARTICLE 14
MISCELLANEOUS
14.1 GOVERNING LAW. THE CONSTRUCTION, VALIDITY AND INTERPRETATION OF THIS
AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING
EFFECT TO ANY PRINCIPLES OF CONFLICTS OF LAW THEREOF.
14.2 Notices. All notices, requests, permissions, waivers, and other
communications hereunder shall be in writing and shall be deemed to have been
duly given when received if delivered by hand, facsimile transmission or by
United States mail (registered, return receipt requested), properly addressed
and postage prepaid:
If to ATG, to:
Aviation Communications Division
AT&T Wireless Services, Inc.
700 5th Avenue, Suite 2100
Seattle, WA 98104
Attention: Mary Brodd, Esq.
Telephone: (206) 515-8289
Telecopier: (206) 515-8259
50
<PAGE> 57
with a copy to:
AT&T Wireless Services, Inc.
5000 Carillon Point
Kirkland, WA 98033
Attention: Mark Thomas
Telephone: (425) 828-8628
Telecopier: (425) 828-2329
and
Friedman Kaplan & Seiler LLP
875 Third Avenue
New York, NY 10022
Attention: Daniel M. Taitz, Esq.
Telephone: (212) 833-1100
Telecopier: (212) 355-6401
If to AWS, to:
AT&T Wireless Services, Inc.
5000 Carillon Point
Kirkland, WA 98033
Attention: Mark Thomas
Telephone: (425) 828-8628
Telecopier: (425) 828-2329
with a copy to:
Friedman Kaplan & Seiler LLP
875 Third Avenue
New York, NY 10022
Attention: Daniel M. Taitz, Esq.
Telephone: (212) 833-1100
Telecopier: (212) 355-6401
51
<PAGE> 58
If to Cantel, to:
Rogers Cantel, Inc.
1 Mount Pleasant Road
Toronto, Ontario M4Y 2Y5
Attention: Rick Giel
Telephone: (416) 935-6980
Telecopier: (416) 935-4648
with a copy to:
Rogers Communications, Inc.
333 Bloor Street East, 10th Floor
Toronto, Ontario M4W 1G9
Attention: Graeme McPhail
Telephone: (416) 935-2505
Telecopier: (416) 935-7627
If to Buyer, to:
Iridium Aero Acquisition Sub, Inc.
c/o Iridium LLC
1575 Eye Street, N.W., Suite 500
Washington, D.C. 20005
Attention: Leo Mondale
Telephone: (202) 408-3800
Telecopier: (202) 408-3801
with a copy to:
Sullivan & Cromwell
1701 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
Attention: Edwin D. Williamson
Telephone: (202) 956-7505
Telecopier: (202) 293-6330
52
<PAGE> 59
If to Iridium, to:
Iridium LLC
1575 Eye Street, N.W., Suite 500
Washington, D.C. 20005
Attention: Leo Mondale
Telephone: (202) 408-3800
Telecopier: (202) 408-3801
with a copy to:
Sullivan & Cromwell
1701 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
Attention: Edwin D. Williamson
Telephone: (202) 956-7505
Telecopier: (202) 293-6330
Such names and addresses may be changed by such notice.
14.3 Entire Agreement. This Agreement, the Related Agreements, the AirOne
Canada Letter Agreement and the Nondisclosure Agreements contain the entire
understanding of the parties hereto with respect to the subject matter contained
herein and therein, and supersedes and cancels all prior agreements,
negotiations, correspondences, undertakings and communications of the parties,
oral or written, regarding such subject matter.
14.4 Amendments. This Agreement may be amended only by a written
instrument executed by the parties or their respective successors or permitted
assigns, provided that any amendment that does not reduce the amount of the
Purchase Price payable to Cantel and does not materially adversely affect the
rights of Cantel under this Agreement, may be executed by the parties other than
Cantel and shall thereupon become effective and be binding on all the parties.
14.5 Headings; References. The article, section and paragraph headings
and table of contents contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. All references herein to "Articles", "Sections", or "Schedules" shall
be deemed to be references to Articles or Sections hereof and Schedules hereto
unless otherwise indicated.
14.6 Counterparts. This Agreement may be executed in one or more
counterparts and each counterpart shall be deemed to be an original.
14.7 Parties in Interest; Assignment. This Agreement shall inure to the
benefit of and be binding upon the parties and their respective successors and
permitted assigns. Nothing in this
53
<PAGE> 60
Agreement, express or implied, is intended to confer upon any Person not a party
to this Agreement any rights or remedies under or by reason of this Agreement.
No party to this Agreement may assign or delegate all or any portion of its
rights, obligations or liabilities under this Agreement without the prior
written consent of the other parties to this Agreement; except that ATG and AWS
may assign any of their rights hereunder to an affiliate of either of them.
14.8 Severability: Enforcement. Whenever possible, each provision of this
Agreement will be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
invalid, illegal or unenforceable under any applicable law or rule in any
jurisdiction, such provision will be ineffective only to the extent of such
invalidity, illegality or unenforceability in such jurisdiction, without
invalidating the remainder of this Agreement in such jurisdiction or any
provision hereof in any other jurisdiction.
14.9 Jurisdiction; Venue; Waiver of Jury Trial. Each party hereby
irrevocably and unconditionally submit to the exclusive jurisdiction of the
state and federal courts located in the Borough of Manhattan, The City of New
York, for any actions, suits, or proceedings arising out of or relating to this
Agreement and the transactions contemplated hereby (and Buyer and Seller agree
not to commence any action, suit or proceeding relating thereto except in such
courts), and further agree that service of any process, summons, notice or
document by U.S. registered mail to its address set forth above shall be
effective service of process of any action, suit or proceeding brought against
it in any such court. Buyers and Sellers hereby irrevocably and unconditionally
waive any objection to the laying of venue of any action, suit or proceeding
arising out of this Agreement or the transactions contemplated hereby in such
state or federal courts as aforesaid and hereby further irrevocably and
unconditionally waive and agree not to plead or claim in any such court that any
such action, suit or proceeding brought in any such court has been brought in an
inconvenient forum. SELLER AND BUYER HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A
JURY TRIAL.
14.10 Waiver. Any of the conditions to Closing set forth in this
Agreement may be waived in writing at any time prior to or at the Closing
hereunder by the party entitled to the benefit thereof. The failure of any party
hereto to enforce at any time any of the provisions of this Agreement shall in
no way be construed to be a waiver of any such provision, nor in any way to
affect the validity of this Agreement or any part hereof or the right of such
party thereafter to enforce each and every such provisions. No waiver of any
breach of or noncompliance with this Agreement shall be held to be a waiver of
any other or subsequent breach or noncompliance.
14.11 Disclosure Schedules. The information contained in the Schedules
hereto shall not be deemed to constitute an admission by Sellers or Buyer or
otherwise imply that any such information is material for purposes of this
Agreement or otherwise. Sellers and Buyer shall have the right at any time prior
to the Closing to supplement or amend in writing the Schedules hereto with
respect to any matter required to be set forth or described in such Schedules;
provided, however, that such supplement or amendment shall not be deemed to cure
a breach of a representation or warranty or satisfy a condition unless waived by
the party for whose benefit the representation or warranty is made. For purposes
of the rights and obligations of the parties hereunder, upon the
54
<PAGE> 61
occurrence of the Closing, any such supplemental or amended disclosure shall be
deemed to have been disclosed as of the date of this Agreement.
55
<PAGE> 62
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the date first above written.
ATG I, INC.
By: /s/ Mark V. Thomas
---------------------------------------
Name: Mark V. Thomas
Title: Vice-President
AT&T WIRELESS SERVICES, INC.
By: /s/ Mark V. Thomas
---------------------------------------
Name: Mark V. Thomas
Title: Vice-President
ROGERS CANTEL INC.
By: /s/ Graeme McPhail
---------------------------------------
Name: Graeme McPhail
Title: Vice President, Associate
General Counsel
By: /s/ R. Giel
---------------------------------------
Name: Rick Giel
Title: Vice President, Finance
IRIDIUM LLC
By: /s/ Leo Mondale
---------------------------------------
Name: Leo Mondale
Title: Senior Vice President
56
<PAGE> 63
IRIDIUM AERO ACQUISITION SUB, INC.
By: /s/ Leo Mondale
---------------------------------------
Name: Leo Mondale
Title: Senior Vice President
57
<PAGE> 1
Exhibit 3
IRIDIUM COMPLETES $1.95 BILLION OF NEW FINANCING
(WASHINGTON,D.C., December 23, 1998)
On December 23, 1998, Iridium finalized and closed $1.95 billion of new
financing consisting of an $800 million Senior Secured Credit Facility (the
"Secured Bank Facility") and a $750 million Guaranteed Credit Facility (the
"Guaranteed Facility") and $400 million of vendor financing from Motorola. The
borrower under each of these facilities is Iridium Operating LLC, a wholly
owned subsidiary of Iridium LLC.
Chase Securities Inc. and Barclays Capital, a division of Barclays Bank PLC,
were Global Arrangers for the Secured Bank Facility and the Guaranteed
Facility. These new Facilities will replace Iridium's existing $1 billion
secured facility and the $275 million guaranteed bank facility and will provide
incremental financing to the Company. Funds from both facilities will be
available to Iridium Operating LLC at closing.
The Secured Bank Facility matures on December 31, 2000 and is secured by
substantially all of the assets of Iridium Operating LLC and by the membership
interests of Iridium Operating LLC.
The Guaranteed Facility is guaranteed by Motorola, Inc. and consists of a $475
million term loan tranche maturing on December 31, 2000 and a $275 million
revolving loan tranche maturing on December 31, 2001.
In addition, Motorola has agreed to provide vendor financing of up to $400
million in connection with payments under the Operations and Maintenance
contract for the Iridium system. This financing also matures on December 31,
2000.
"We are particularly pleased with the bank market reception to these financings
in what has been a difficult quarter for everyone to raise new financing. These
incremental financing sources, when combined with existing sources and
commitments, should provide Iridium with funding through planned positive cash
flow," said Roy Grant, Vice President and Chief Financial Officer of Iridium
LLC.
Iridium LLC became the world's first global satellite phone and paging company
on November 1, 1998. The network of 66-low earth orbiting satellites combined
with terrestrial cellular systems, enables subscribers to communicate virtually
anywhere in the world using one phone and pager, one phone number, and
receiving one monthly bill. Customers access participating local cellular
networks when available, and the Iridium satellite network when outside
terrestrial cellular coverage. Iridium World Communications, Ltd. (NASDAQ:
IRIDF) is the public investment vehicle of Iridium LLC.
<PAGE> 1
EXHIBIT 4
==============================================================
IRIDIUM OPERATING LLC
------------------------------------
SENIOR SECURED CREDIT AGREEMENT
dated as of
December 23, 1998
------------------------------------
$800,000,000
------------------------------------
CHASE SECURITIES INC.
and
BARCLAYS BANK PLC,
as Global Lead Arrangers and Joint Book Managers
THE CHASE MANHATTAN BANK,
as Administrative Agent and Collateral Agent
BARCLAYS BANK PLC,
as Documentation Agent
MERRILL LYNCH, PIERCE, FENNER & SMITH, INC.
as Syndication Agent
==============================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE I DEFINITIONS.................................................................................................1
SECTION 1.01. Defined Terms...............................................................................1
SECTION 1.02. Classification of Loans and Borrowings.....................................................27
SECTION 1.03. Terms Generally............................................................................28
SECTION 1.04. Accounting Terms; GAAP.....................................................................28
ARTICLE II THE CREDITS...............................................................................................28
SECTION 2.01. The Commitments............................................................................28
SECTION 2.02. Loans and Borrowings.......................................................................29
SECTION 2.03. Requests for Borrowings....................................................................29
SECTION 2.04. Funding of Borrowings......................................................................30
SECTION 2.05. Interest Elections.........................................................................30
SECTION 2.06. Termination of the Commitments.............................................................31
SECTION 2.07. Repayment of Loans; Evidence of Debt.......................................................32
SECTION 2.08. Optional Prepayment of Loans...............................................................32
SECTION 2.09. Mandatory Prepayments......................................................................33
SECTION 2.10. Fees.......................................................................................35
SECTION 2.11. Interest...................................................................................36
SECTION 2.12. Alternate Rate of Interest.................................................................36
SECTION 2.13. Increased Costs............................................................................37
SECTION 2.14. Break Funding Payments.....................................................................38
SECTION 2.15. Taxes......................................................................................39
SECTION 2.16. Payments Generally; Pro Rata Treatment; Sharing of Set-offs................................40
SECTION 2.17. Mitigation Obligations; Replacement of Lenders.............................................41
ARTICLE III REPRESENTATIONS AND WARRANTIES...........................................................................42
SECTION 3.01. Organization; Qualification................................................................42
SECTION 3.02. Powers.....................................................................................42
SECTION 3.03. Authorization..............................................................................43
SECTION 3.04. No Conflicts...............................................................................43
SECTION 3.05. Enforceability.............................................................................43
SECTION 3.06. Government Approvals.......................................................................43
SECTION 3.07. Financial Condition; No Material Adverse Change............................................44
SECTION 3.08. Properties.................................................................................45
SECTION 3.09. Proceedings................................................................................45
SECTION 3.10. Compliance with Laws.......................................................................46
SECTION 3.11. Environmental Matters......................................................................46
SECTION 3.12. Investment and Holding Company Status......................................................46
SECTION 3.13. Taxes......................................................................................47
SECTION 3.14. ERISA......................................................................................47
</TABLE>
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<TABLE>
<S> <C>
SECTION 3.15. Disclosure.................................................................................47
SECTION 3.16. Use of Credit..............................................................................48
SECTION 3.17. Debt Agreements............................................................................48
SECTION 3.18. Liens......................................................................................48
SECTION 3.19. Capitalization.............................................................................48
SECTION 3.20. Subsidiaries...............................................................................48
SECTION 3.21. Investments................................................................................49
SECTION 3.22. Restrictive Agreements.....................................................................49
SECTION 3.23. Business...................................................................................49
SECTION 3.24. Collateral; Security Interests.............................................................49
SECTION 3.25. Sufficiency of Project Documents...........................................................49
SECTION 3.26. Employee Matters...........................................................................50
SECTION 3.27. Other Transaction Parties..................................................................50
SECTION 3.28. Absence of Immunity........................................................................51
SECTION 3.29. Year 2000..................................................................................51
ARTICLE IV CONDITIONS................................................................................................51
SECTION 4.01. Conditions Precedent to the First Borrowing................................................51
SECTION 4.02. Conditions Precedent to the Second Borrowing...............................................52
ARTICLE V INFORMATION................................................................................................52
SECTION 5.01. Financial Statements and Other Information.................................................52
SECTION 5.02. Notices of Material Events.................................................................54
SECTION 5.03. Notices under Principal Project Documents..................................................54
ARTICLE VI AFFIRMATIVE COVENANTS.....................................................................................55
SECTION 6.01. Maintenance of Existence...................................................................55
SECTION 6.02. Maintenance of Properties..................................................................55
SECTION 6.03. Taxes......................................................................................55
SECTION 6.04. Compliance with Laws.......................................................................55
SECTION 6.05. Government Approvals.......................................................................55
SECTION 6.06. Environmental Compliance...................................................................56
SECTION 6.07. Books and Records..........................................................................56
SECTION 6.08. Inspection Rights..........................................................................56
SECTION 6.09. Use of Proceeds............................................................................57
SECTION 6.10. Collateral; Security Interests.............................................................57
SECTION 6.11. Certain Obligations Respecting Subsidiaries................................................60
SECTION 6.12. License Subsidiaries; Real Estate Subsidiaries.............................................61
ARTICLE VII NEGATIVE COVENANTS.......................................................................................62
SECTION 7.01. Indebtedness...............................................................................62
SECTION 7.02. Liens......................................................................................64
SECTION 7.03. Mergers, Consolidations, Etc...............................................................64
SECTION 7.04. Sale of Assets.............................................................................64
</TABLE>
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<TABLE>
<S> <C>
SECTION 7.05. Purchase of Assets.........................................................................65
SECTION 7.06. Investments................................................................................65
SECTION 7.07. Restricted Payments........................................................................65
SECTION 7.08. Transactions with Affiliates...............................................................65
SECTION 7.09. Restrictive Agreements.....................................................................66
SECTION 7.10. Financial Covenants........................................................................66
SECTION 7.11. Capital Expenditures.......................................................................68
SECTION 7.12. Operating Leases...........................................................................68
SECTION 7.13. Sales and Lease-Backs......................................................................68
SECTION 7.14. Payment of Certain Indebtedness............................................................69
SECTION 7.15. Other Debt Obligations.....................................................................69
SECTION 7.16. Organizational Documents...................................................................70
SECTION 7.17. Nature of Business.........................................................................70
SECTION 7.18. Fiscal Year................................................................................70
ARTICLE VIII CERTAIN BUSINESS-RELATED COVENANTS; MOTOROLA GUARANTEE OBLIGATION.......................................71
SECTION 8.01. Insurance..................................................................................71
SECTION 8.02. Accounts...................................................................................73
SECTION 8.03. Approved Budget; Financial Projections.....................................................73
SECTION 8.04. Principal Project Documents................................................................74
SECTION 8.05. Other Project Documents....................................................................75
SECTION 8.06. Restoration................................................................................76
SECTION 8.07. Performance Standards......................................................................76
SECTION 8.08. Minimum Regulatory Approvals...............................................................76
SECTION 8.09. Motorola Guarantee Obligation..............................................................76
ARTICLE IX EVENTS OF DEFAULT.........................................................................................79
SECTION 9.01. Iridium Events of Defaults.................................................................79
SECTION 9.02. Motorola Events of Default.................................................................82
SECTION 9.03. Other Project Parties' Events of Default...................................................85
SECTION 9.04. Other Events of Default....................................................................86
ARTICLE X THE AGENTS AND GLOBAL LEAD ARRANGERS.......................................................................87
ARTICLE XI MISCELLANEOUS.............................................................................................89
SECTION 11.01. Notices...................................................................................89
SECTION 11.02. Waivers; Amendments.......................................................................90
SECTION 11.03. Expenses; Indemnity; Damage Waiver........................................................91
SECTION 11.04. Successors and Assigns....................................................................92
SECTION 11.05. Survival..................................................................................95
SECTION 11.06. Counterparts; Effectiveness; Integration..................................................95
SECTION 11.07. Severability..............................................................................95
SECTION 11.08. Right of Setoff...........................................................................96
</TABLE>
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<TABLE>
<S> <C>
SECTION 11.09. Governing Law; Jurisdiction; Consent to Service of Process................................96
SECTION 11.10. WAIVER OF JURY TRIAL......................................................................97
SECTION 11.11. Headings..................................................................................97
SECTION 11.12. Confidentiality...........................................................................97
SECTION 11.13. No Third Party Beneficiaries..............................................................98
SCHEDULE I - Commitments
SCHEDULE II - Real Property
SCHEDULE III - Litigation
SCHEDULE IV - Environmental Matters
SCHEDULE V - Indebtedness
SCHEDULE VI - Liens
SCHEDULE VII - Subsidiaries
SCHEDULE VIII - Investments
SCHEDULE IX - Restrictive Agreements
SCHEDULE X - Employee Matters
SCHEDULE XI - Affiliate Agreements
APPENDIX 1 - Conditions Precedent
APPENDIX 2 - Insurance Program
EXHIBIT A - Form of Assignment and Acceptance
EXHIBIT B - Form of Security Agreement
EXHIBIT C - Form of Parent Security Agreement
EXHIBIT D - Form of Subsidiary Guarantee Agreement
EXHIBIT E - Form of Subsidiary Guarantee Assumption Agreement
EXHIBIT F - Form of Depositary Agreement
EXHIBIT G - Form of Motorola Consent
EXHIBIT H - Form of Motorola Pledge Agreement
EXHIBIT I - Form of Borrowing Request
</TABLE>
iv
<PAGE> 6
SENIOR SECURED CREDIT AGREEMENT dated as of December 23, 1998
among:
IRIDIUM OPERATING LLC, a limited liability company duly organized
and validly existing under the laws of the State of Delaware (the
"Company");
Each of the lenders that is a signatory hereto identified under
the caption "LENDERS" on the signature pages hereto and each lender that
becomes a "Lender" after the date hereof pursuant to Section 11.04(b)
(individually, a "Lender" and, collectively, the "Lenders");
CHASE SECURITIES INC. and BARCLAYS BANK PLC, each in its capacity
as arranger in respect of this Agreement (each in such capacity, together
with its successors in such capacity, a "Global Lead Arranger" and,
collectively, the "Global Lead Arrangers");
THE CHASE MANHATTAN BANK, as administrative agent for the Lenders
(in such capacity, together with its successors in such capacity, the
"Administrative Agent") and as collateral agent (the "Collateral Agent");
and
BARCLAYS BANK PLC, as documentation agent for the Lenders (in such
capacity, together with its successors in such capacity, the
"Documentation Agent").
The Company has requested that the Lenders make loans to the
Company in an aggregate principal amount not exceeding $800,000,000 at any one
time outstanding for the purpose of refinancing certain existing indebtedness of
the Company, paying fees and expenses relating to the refinancing thereof
including with respect to this Agreement and paying costs incurred in the
development and operation of the IRIDIUM(R) business, and the Lenders are
prepared to make such loans upon the terms and conditions hereof. Accordingly,
the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms. As used in this Agreement, the
following terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Alternate Base Rate.
"Accounts" has the meaning assigned to such term in the Depositary
Agreement.
"Accrued Revenues" means all net revenues to the Company
and its Subsidiaries determined on a consolidated basis in accordance with GAAP,
except, with respect to equipment sales, which are net of cost of goods sold.
Senior Secured Credit Agreement
<PAGE> 7
2
"Adjusted EBITDA" means, for any period, with respect to the
Company and its Subsidiaries on a consolidated basis, without duplication, in
accordance with GAAP, the sum (without duplication) of (a) Adjusted Net Income,
plus (b) depreciation and amortization, plus (c) Interest Expense plus (d) all
other non-cash expenses, to the extent deducted in determining Adjusted Net
Income, plus (e) income tax expense, to the extent deducted in determining
Adjusted Net Income, minus (f) non-cash gains, to the extent included in
determining Adjusted Net Income.
"Adjusted LIBO Rate" means, with respect to any Eurodollar
Borrowing for any Interest Period, an interest rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such
Interest Period multiplied by (b) the Statutory Reserve Rate.
"Adjusted Net Income" means, for any period, the net income of the
Company and its Subsidiaries, determined on a consolidated basis, without
duplication, in accordance with GAAP; provided, however, that in calculating
Adjusted Net Income for any period all payments including deferred payments
under the O&M Contract for such period shall be deducted as an expense.
"Administrative Agent" means The Chase Manhattan Bank, in its
capacity as administrative agent for the Lenders hereunder and under the other
Credit Documents (or certain of them).
"Administrative Questionnaire" means an Administrative
Questionnaire in a form supplied by the Administrative Agent.
"Affected Property" means, with respect to any Event of Loss, the
property of the Company or any of its Subsidiaries lost, destroyed, damaged,
condemned (including, without limitation, through a Condemnation) or otherwise
taken as a result of such Event of Loss.
"Affiliate" means, with respect to a specified Person, another
Person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the Person specified.
Notwithstanding the foregoing, no individual shall be an Affiliate solely by
reason of his or her being a director, officer or employee of the Company or any
of its Subsidiaries.
"Agents" means the Administrative Agent, the Collateral Agent and
the Documentation Agent.
"Agreement Regarding Guarantee" means the Third Amended and
Restated Agreement Regarding Guarantee dated as of December 23, 1998 among
Motorola, Iridium LLC and the Company, amending and restating the Second Amended
and Restated Agreement Regarding Guarantee dated as of May 11, 1998 among
Motorola, Iridium LLC and the Company, amending and restating the Amended and
Restated Agreement Regarding Guarantee dated as of July 11, 1997 between
Motorola and Iridium LLC, amending and restating the Agreement Regarding
Guarantee dated as of August 21, 1996 between Motorola and Iridium LLC.
Senior Secured Credit Agreement
<PAGE> 8
3
"Alternate Base Rate" means, for any day, a rate per annum equal
to the greater of (a) the Prime Rate in effect on such day and (b) the Federal
Funds Effective Rate in effect on such day plus 1/2 of 1%. Any change in the
Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective from and including the effective date of such
change in the Prime Rate or the Federal Funds Effective Rate, respectively.
"Annual Budget" means a budget for Costs covering a fiscal year of
the Company adopted by the Company's board of directors in accordance with
Section 8.03(a).
"Annualized Adjusted EBITDA" means, as at any date, Adjusted
EBITDA for the two consecutive fiscal quarters ending on or most recently ended
prior to such date multiplied by two.
"Annualized Interest Expense" means, as at any date, Interest
Expense for the two consecutive fiscal quarters ending on or most recently ended
prior to such date multiplied by two.
"Applicable Margin" means (a) with respect to ABR Loans, 2.75% and
(b) with respect to Eurodollar Loans, 4.00%.
"Applicable Percentage" means, with respect to any Lender, the
percentage of the total Commitments represented by such Lender's aggregate
Commitments. If the Commitments have terminated or expired, the Applicable
Percentages shall be determined based upon the applicable Commitments most
recently in effect, giving effect to any assignments.
"Approved Budget" means, at any time, the Initial Approved Budget
or the Annual Budget, as the case may be, then in effect, and each amendment
thereof or supplement thereto in accordance with Section 8.03(a).
"Approved Budget Amount" means, as at any date, the sum of (a) the
aggregate Costs set forth in the Approved Budget for any period as originally in
effect, (b) from and after the adoption of the Approved Budget for the fiscal
year ending December 31, 1999, $75,000,000 and (c) any additional Costs incurred
by the Company in respect of handsets and/or pagers purchased from Motorola or
Kyocera, but only to the extent such Costs are paid with the proceeds of
Indebtedness permitted under Section 7.01(k).
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an assignee (with the consent of any party whose
consent is required by Section 11.04), and accepted by the Administrative Agent,
in the form of Exhibit A or any other form approved by the Administrative Agent
and the Company.
"Average Life" means, as of the date of determination with respect
to any Indebtedness, the quotient obtained by dividing (a) the sum of the
products of the number of years from the date of determination to the dates of
each successive scheduled principal payment of such Indebtedness multiplied by
the amount of such payment by (b) the sum of all such payments.
Senior Secured Credit Agreement
<PAGE> 9
4
"Barclays Capital" means Barclays Bank PLC.
"Board" means the Board of Governors of the Federal Reserve System
of the United States of America.
"board of directors" means, with respect to the Company or any
other Person, its board of directors or any committee thereof duly authorized by
such board of directors to take action on its behalf.
"Borrowing" means Loans made, converted or continued on the same
date and, in the case of Eurodollar Loans, asto which a single Interest Period
is in effect.
"Borrowing Request" means a request by the Company for a Borrowing
in accordance with Section 2.03, substantially in the form of Exhibit I.
"Budget Period" means, at any time, the fiscal quarter or fiscal
year, as applicable, covered by the Approved Budget in effect at such time.
"Business Day" means any day that is not a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or required
by law to remain closed; provided that, when used in connection with a
Eurodollar Loan, the term "Business Day" shall also exclude any day on which
banks are not open for dealings in Dollar deposits in the London interbank
market.
"Capital Expenditures" means, for any period, the sum for the
Company and its Subsidiaries of the aggregate amount of cash expenditures
(including the aggregate amount of Capital Lease Obligations incurred during
such period) made to acquire or construct fixed assets, plant and equipment
(including renewals, improvements and replacements, but excluding Restorations
and other repairs) during such period, determined on a consolidated basis,
without duplication, in accordance with GAAP; provided that, for purposes of
this Agreement, payments under the O&M Contract shall not constitute Capital
Expenditures.
"Capital Lease Obligations" of any Person means the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"Chase" means The Chase Manhattan Bank.
"Change in Law" means (a) the adoption of any law, rule or
regulation after the date of this Agreement, (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any Government
Authority after the date of this Agreement or (c) compliance by any Lender (or,
for purposes of Section 2.13(b), by any lending office of such Lender or by such
Lender's holding company, if any) with any request, guideline or directive
Senior Secured Credit Agreement
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5
(whether or not having the force of law) of any Government Authority made or
issued after the date of this Agreement.
"Closing Date" means the date (not later than December 31, 1998)
on which all of the conditions set forth in Section 4.01 shall have been
satisfied or waived pursuant to Section 11.02.
"Collateral" means the "Collateral" as such term is defined in the
respective Security Documents.
"Collateral Agent" means Chase in its capacity as collateral agent
under the Security Documents (or certain of them).
"Commitment" means, with respect to each Lender, the commitment,
if any, of such Lender to make Loans, expressed as an amount representing the
maximum aggregate amount of such Lender's Exposure hereunder, as such commitment
may be reduced or increased from time to time pursuant to assignments by or to
such Lender pursuant to Section 11.04. The initial amount of each Lender's
Commitment is set forth on Schedule I, or in the Assignment and Acceptance
pursuant to which such Lender shall have assumed its Commitment, as applicable.
The initial aggregate amount of the Lenders' Commitments is $800,000,000.
"Commitment Termination Date" means the date occurring 30 days
after the Closing Date; provided that if such day is not a Business Day, the
Commitment Termination Date shall occur on the next succeeding Business Day.
"Company LLC Agreement" means the Limited Liability Company
Agreement of Iridium Operating LLC dated as of December 18, 1997, pursuant to
which the Company is organized.
"Condemnation" means the condemnation or seizure by a Government
Authority of, or requisition or taking by a Government Authority of title to,
all or any portion of the property of the Company or any of its Subsidiaries
under power of eminent domain or otherwise.
"Condemnation Proceeds" means all compensation, awards, damages
and other payments received by the Company or any of its Subsidiaries as a
result of any Condemnation.
"Control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or
otherwise.
"Controlling" has the meaning correlative to the term "Control."
"Controlled" has the meaning correlative to the term "Control."
"Costs" means, for any period, all costs and expenses incurred or
to be incurred by the Company and its Subsidiaries on a consolidated basis
during such period in connection with the Iridium Business, including, without
limitation, all interest on and other regularly
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6
scheduled payments of Indebtedness permitted hereunder payable during such
period, Operation and Maintenance Expenses for such period, and expenses
(including, without limitation, all legal fees and related disbursements)
reasonably incurred in such period by the Company and its Subsidiaries in
connection with the preparation, negotiation, execution and delivery of any of
the Transaction Documents.
"Covenant Conversion Date" means December 31, 1999.
"Credit Documents" means, collectively, this Agreement, the
promissory notes (if any) issued hereunder, the Security Documents, the
Subsidiary Guarantee Agreement and the Motorola Agreements.
"Credit Parties" means, collectively, the Company and each of the
Subsidiary Guarantors.
"Cumulative Accrued Revenues" means, as at any date of
determination, all Accrued Revenues for the period commencing on November 1,
1998 and ending on such date.
"Cumulative Adjusted Accrued Revenues" means, as at any date of
determination, (a) Cumulative Accrued Revenues for the period ending on such
date, minus (b) any receivable included in Cumulative Accrued Revenues that is
payable more than 60 days after such date or is unpaid for more than 10 days
after the original due date thereof, minus (c) to the extent not deducted in
calculating Cumulative Accrued Revenues, discounts to, or rebates from, any
obligor of any receivable included therein (other than any receivable to the
extent excluded under clause (b) above).
"Cumulative Cash Revenues" means, as at any date of determination,
all revenues of the Company and its Subsidiaries in respect of the Iridium
Business received in Dollars (or in any other currency and converted into
Dollars) for the period commencing November 1, 1998 and ending on such date,
determined on a consolidated basis and without duplication.
"Current Assets" of any Person means all assets of such Person
that would, in accordance with GAAP, be classified as current assets of a
company conducting a business the same as or similar to that of such Person,
after deducting adequate reserves maintained in accordance with GAAP.
"Current Liabilities" of any Person means all obligations of such
Person that would, in accordance with GAAP, be classified as current liabilities
of such Person.
"Debt Incurrence" means the incurrence by the Company or any of
its Subsidiaries of any Indebtedness (other than any Equity Issuance).
"Debt Service" means, for any period, the sum for the Company and
its Subsidiaries, determined on a consolidated basis, without duplication, in
accordance with GAAP, of the following: (a) all regularly scheduled payments of
principal of any Indebtedness made during such period plus (b) all Interest
Expense for such period.
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"Default" means any event or condition which constitutes an Event
of Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Deferred O&M Amounts" means amounts owing to Motorola under the
O&M Contract aggregating up to $400,000,000 for the period commencing November
1998, together with any accrued interest thereon (and including any promissory
notes issued by the Company to Motorola to evidence such amounts and such
interest).
"Depositary Agreement" means the Deposit, Disbursement and Account
Control Agreement substantially in the form of Exhibit F between the Company,
the Collateral Agent and the Depositary Bank.
"Depositary Bank" means Chase in its capacity as depositary bank
under the Depositary Agreement.
"Dispose" has the meaning correlative to the term "Disposition."
"Disposition" means any sale, assignment, transfer or other
disposition of assets (whether now owned or hereafter acquired) of the Company
or any of its Subsidiaries by the Company or any of its Subsidiaries to any
other Person (other than any such sale, assignment, transfer or other
disposition constituting an Event of Loss).
"Dollars" or "$" refers to lawful money of the United States of
America.
"Domestic Subsidiary" means each Subsidiary of the Company that is
organized under the laws of the United States of America or any political
subdivision thereof.
"Environmental Claim" means, with respect to any Person, any
written notice, claim, administrative, regulatory or judicial action, suit,
judgment, written demand or other written communication by any other Person
alleging or asserting such Person's liability for investigatory costs, cleanup
costs, governmental response costs, damages to natural resources or other
property of such Person, personal injuries, fines, penalties or other actions
arising out of, based on or resulting from (a) the presence, Use, threatened
Release or Release into the environment of any Hazardous Material at any
location, whether or not owned by such Person or (b) any fact, circumstance,
condition or occurrence forming the basis of any violation, or alleged
violation, of any Environmental Law or other failure, or alleged failure, to
comply with the requirements of any Environmental Law.
"Environmental Laws" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Government Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to environmental health and safety matters.
"Equity Issuance" means (a) any issuance or sale by the Company or
any of its Subsidiaries of (i) any of its membership interests, capital stock or
other equity interests, (ii) any
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warrants or options exercisable in respect thereof or (iii) any other security
or instrument representing an equity interest in the Company or any of its
Subsidiaries, including any Indebtedness, interests, other securities or rights
of the Company or any of its Subsidiaries that are exchangeable for or
exercisable or convertible into equity interests of IWCL, the Company or any of
its Affiliates, either immediately or upon or after the arrival of a specified
date or the occurrence of a specified event or (b) the receipt by the Company or
any of its Subsidiaries after the date hereof of any capital contribution
(whether or not evidenced by any equity security issued by the recipient of such
contribution).
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with the Company, is treated as a single employer
under Section 414(b) or (c) of the U.S. Tax Code, or, solely for purposes of
Section 302 of ERISA and Section 412 of the U.S. Tax Code, is treated as a
single employer under Section 414 of the U.S. Tax Code.
"ERISA Event" means (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the U.S. Tax Code or Section 302 of ERISA), whether or
not waived; (c) the filing pursuant to Section 412(d) of the U.S. Tax Code or
Section 303(d) of ERISA of an application for a waiver of the minimum funding
standard with respect to any Plan; (d) the incurrence by the Company or any of
its ERISA Affiliates of any liability under Title IV of ERISA with respect to
the termination of any Plan; (e) the receipt by the Company or any ERISA
Affiliate from the PBGC or a plan administrator of any notice relating to an
intention to terminate any Plan or Plans or to appoint a trustee to administer
any Plan; (f) the incurrence by the Company or any of its ERISA Affiliates of
any liability with respect to the withdrawal or partial withdrawal from any Plan
or Multiemployer Plan; or (g) the receipt by the Company or any ERISA Affiliate
of any notice, or the receipt by any Multiemployer Plan from the Company or any
ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability
or a determination that a Multiemployer Plan is, or is expected to be, insolvent
or in reorganization, within the meaning of Title IV of ERISA.
"Eurodollar", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.
"Event of Default" has the meaning assigned to such term in
Article IX.
"Event of Loss" means, with respect to any property of the Company
or any of its Subsidiaries, any loss of, destruction of or damage to, or any
condemnation (including, without limitation, a Condemnation) or other taking by
a Government Authority of, such property of the Company or any such Subsidiary.
"Excess Cash Flow" means, for any period, (a) Adjusted EBITDA for
such period, minus (b) the sum of (i) Debt Service for the Company and its
Subsidiaries for such
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9
period plus (ii) the aggregate amount of all Capital Expenditures for the
Company and its Subsidiaries made during such period, except for any such
Capital Expenditures to the extent financed with the proceeds of Indebtedness
incurred pursuant to Section 7.01(i) or (j) during such period plus (iii) the
aggregate amount of Restricted Payments paid during said period pursuant to
Section 7.07(a), minus (or plus) (c) the increase (or decrease) in Working
Capital of the Company and its Subsidiaries from the day immediately prior to
the first day of such period to the last day of such period.
"Excluded Debt Incurrence" means (a) Indebtedness incurred by the
Company or its Subsidiaries under Section 7.01 (other than clause (f) thereof)
and (b) any other Indebtedness of the Company or any of its Subsidiaries
permitted under Section 7.01(f) to the extent the proceeds thereof are used to
refinance any portion of Indebtedness of the Company or any of its Subsidiaries
that is guaranteed by Motorola pursuant to Section 7.01(c) and is included in
the $250,000,000 exclusion under clause (ii) of Section 2.09(j) (as contemplated
by the last sentence thereof).
"Excluded Disposition" means any Disposition permitted under one
of the specified clauses of Section 7.04 (other than clause (b) thereof).
"Excluded Equity Issuance" means (a) any issuance or sale of
capital stock or other equity interests by any Subsidiary of the Company to the
Company or any Wholly Owned Subsidiary of the Company, (b) any capital
contribution by the Company or any Wholly Owned Subsidiary of the Company to any
Subsidiary of the Company or (c) any Equity Issuance to the extent the proceeds
thereof are used to refinance any portion of Indebtedness of the Company or any
of its Subsidiaries that is guaranteed by Motorola pursuant to Section 7.01(c)
and is included in the $250,000,000 exclusion under clause (ii) of Section
2.09(j) (as contemplated by the last sentence thereof).
"Excluded Taxes" means, with respect to the Administrative Agent,
any Lender or any other recipient of any payment to be made by or on account of
any obligation of the Company hereunder, (a) income or franchise taxes imposed
on (or measured by) its net income by the United States of America, or by the
jurisdiction under the laws of which such recipient is organized or in which its
principal office is located or, in the case of any Lender, in which its
applicable lending office is located, (b) any branch profits taxes imposed by
the United States of America or any similar tax imposed by any other
jurisdiction in which the Company is located and (c) in the case of a Foreign
Lender (other than an assignee pursuant to a request by the Company under
Section 2.17(b)), any withholding tax that is imposed on amounts payable to such
Foreign Lender at the time such Foreign Lender becomes a party to this Agreement
or is attributable to such Foreign Lender's failure or inability to comply with
Section 2.15(e), except to the extent that such Foreign Lender's assignor (if
any) was entitled, at the time of assignment, to receive additional amounts from
the Company with respect to such withholding tax pursuant to Section 2.15(a).
"Existing Guaranteed Credit Agreement" has the meaning assigned to
such term in Section 6.09.
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"Existing Secured Credit Agreement" has the meaning assigned to
such term in Section 6.09.
"Existing Senior Notes" means, collectively, the Series A Senior
Notes, the Series B Senior Notes, the Series C Senior Notes and the Series D
Senior Notes.
"Existing Senior Subordinated Notes" means the Indebtedness of the
Company (as transferee of Iridium LLC) in respect of the 14 1/2% Senior
Subordinated Discount Notes due 2006 in an aggregate fully accreted principal
amount at the maturity of $480,000,000.
"Exposure" means, with respect to any Lender at any time, the
aggregate outstanding principal amount of such Lender's Loans at such time plus
the unutilized portion of such Lender's Commitment (if any).
"FCC" means the U.S. Federal Communications Commission.
"FCC License" means the authorization of the FCC held by Space
System License, Inc., a wholly owned Subsidiary of Motorola, as of the date of
this Agreement with respect to the construction, launch and operation of the
Iridium System as set forth in FCC's Orders and Authorizations DA 95-131,
released January 31, 1995, DA 95-372 released February 28, 1995, FCC 96-279,
released June 27, 1996 and DA 96-1789, released October 30, 1996.
"Federal Funds Effective Rate" means, for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Financial Projections" means the financial projections for the
Company and its Subsidiaries set forth in Section 9 of the Information
Memorandum.
"Foreign Lender" means any Lender organized under the laws of a
jurisdiction other than the United States of America, any State thereof or the
District of Columbia.
"Foreign Subsidiary" means any Subsidiary of the Company other
than a Domestic Subsidiary.
"Gateway Authorization Agreements" means each gateway
authorization agreement between the investor party thereto and the Company
(as transferee of Iridium LLC).
"GAAP" means generally accepted accounting principles in the
United States of America, as in effect from time to time.
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"General Receipt & Disbursement Account" has the meaning assigned
to such term in the Depositary Agreement.
"Government Approval" means any authorization, consent, approval,
license, lease, ruling, permit, concession, grant, franchise, agreement, tariff,
rate, certification, exemption, filing or registration by or with any Government
Authority relating to the Iridium Business, the execution, delivery and
performance of the Transaction Documents, the creation, perfection and
enforcement of the Liens contemplated by the Security Documents and the other
transactions contemplated hereby.
"Government Authority" means the government of any nation or any
political subdivision thereof, whether state, territory, province or otherwise,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government.
"Government Rule" means any statute, law, regulation, ordinance,
rule, judgment, order, decree, injunction, permit, concession, grant, franchise,
license, agreement, directive, environmental guideline, policy, restriction or
rule of common law, requirement of, or other governmental restriction or any
similar form of decision of or determination by, or any interpretation or
administration of any of the foregoing by, any Government Authority, whether now
or hereafter in effect.
"Guarantee" of or by any Person (the "guarantor") means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any direct or indirect obligation of the guarantor (a)
to purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness or other obligation or to purchase (or to advance or supply
funds for the purchase of) any security for the payment thereof, (b) to purchase
or lease property, securities or services for the purpose of assuring the owner
of such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; provided that the term "Guarantee" shall not include endorsements
for collection or deposit in the ordinary course of business.
"Guarantee Obligation Release Date" has the meaning assigned to
such term in Section 8.09(c).
"Guarantee Obligation Termination Date" has the meaning assigned
to such term in Section 8.09(b).
"Hazardous Materials" means all explosive or radioactive
substances or wastes and all hazardous or toxic substances, wastes or other
pollutants, including petroleum or petroleum distillates, asbestos or asbestos
containing materials, polychlorinated biphenyls, radon
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gas, infectious or medical wastes and all other hazardous substances or wastes
of any nature regulated as such pursuant to any applicable Environmental Law.
"Hedging Agreement" means any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement or
other interest or currency exchange rate or commodity price hedging arrangement.
"IBSS Agreement" means the Master Agreement executed on or about
December 16, 1996 between the Company (as transferee of Iridium LLC) and
Andersen Consulting, LLP, with respect to the Iridium Business Support System.
"Impair" has a meaning correlative to the term "Impairment."
"Impairment" means, with respect to any Project Document or
Government Approval, any rescission, termination, cancellation, repeal,
invalidity, suspension (other than by reason of an "excusable delay" (as such
term is used in any of the Principal Project Documents) to the extent such
suspension by reason of such excusable delay is expressly permitted by such
Principal Project Document), withdrawal, withholding, injunction, inability to
satisfy stated conditions to effectiveness or amendment, modification or
supplementation (other than, in the case of a Project Document, any such
amendment, modification or supplementation permitted by Section 8.04 or 8.05
and, in the case of a Government Approval, any such amendment, modification or
supplementation permitted by Section 6.05 and, in the case of the FCC License,
the transfer thereof to a Subsidiary of Motorola or to the Company as
contemplated in the Motorola Consent) of such Project Document or Government
Approval in whole or in part, which (in any case) is adverse to the interests of
any Transaction Party or the Lenders.
"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
under conditional sale or other title retention agreements relating to property
acquired by such Person, (d) all obligations of such Person in respect of the
deferred purchase price of property or services (excluding trade accounts
payable or accrued liabilities arising in the ordinary course of business that
are not overdue by more than 30 days or that are being contested in good faith),
including without limitation any Motorola Vendor Financing, (e) all Indebtedness
of others secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien on property
owned or acquired by such Person, whether or not the Indebtedness secured
thereby has been assumed, (f) all Guarantees by such Person of Indebtedness of
others, (g) all Capital Lease Obligations of such Person, (h) all obligations,
contingent or otherwise, of such Person as an account party in respect of
letters of credit and letters of guaranty (excluding any ordinary trade credit),
(i) all obligations, contingent or otherwise, of such Person in respect of
bankers' acceptances and (j) all obligations, contingent or otherwise, of such
Person to redeem mandatorily redeemable preferred stock. The Indebtedness of any
Person shall include, without duplication, the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person's ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.
Indebtedness shall refer to the principal amount thereof or, in the case of
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Indebtedness issued at a discount, the accreted value thereof. In no event shall
Indebtedness include any deposit, advance or similar arrangement in connection
with the Iridium clearinghouse function (as described in Article IV of the
Gateway Authorization Agreements).
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Information Memorandum" means the Confidential Information
Memorandum dated November 1998 with respect to the credit facilities provided
for in this Agreement.
"Initial Approved Budget" means the budget for Costs for the
fiscal quarter ending March 31, 1999, approved on October 21, 1998 by the
Company's board of directors.
"Intellectual Property" means patents, patent rights, patent
applications, licenses, inventions, know-how, copyrights, trademarks, trademark
registrations, service marks, service mark registrations, trade names or other
intellectual property, including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or procedures, but
excluding any Government Approvals.
"Interest Coverage Ratio" means, as at any date, the ratio of (a)
Annualized Adjusted EBITDA to (b) Annualized Interest Expense.
"Interest Election Request" means a request by the Company to
convert or continue a Borrowing in accordance with Section 2.05.
"Interest Expense" means, for any period, for the Company and its
Subsidiaries, determined on a consolidated basis, without duplication, in
accordance with GAAP, the sum of (a) all interest in respect of Indebtedness
accrued or capitalized during such period (including the interest component of
any payments in respect of Capital Lease Obligations, but excluding any interest
not required to be paid in cash) plus (b) the net amount payable (or minus the
net amount receivable) under any interest rate Hedging Agreements during such
period (whether or not actually paid or received during such period).
"Interest Payment Date" means (a) with respect to any ABR Loan,
each Quarterly Date and (b) with respect to any Eurodollar Loan, the last day of
the Interest Period applicable to the Borrowing of which such Loan is a part
and, in the case of a Eurodollar Borrowing with an Interest Period of more than
three months' duration, each day prior to the last day of such Interest Period
that occurs at intervals of three months' duration after the first day of such
Interest Period.
"Interest Period" means, with respect to any Eurodollar Borrowing,
the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the calendar month that is one, two, three, six
or (with the consent of all Lenders) nine or twelve months thereafter, as the
Company may elect; provided that (i) if any Interest Period would end on a day
other than a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless such next succeeding Business Day would fall in
the next calendar month, in which case such Interest Period shall end on the
next preceding Business Day and (ii) any Interest Period that commences on the
last Business Day of a calendar month (or on a day for
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which there is no numerically corresponding day in the last calendar month of
such Interest Period) shall end on the last Business Day of the last calendar
month of such Interest Period. For purposes hereof, the date of a Borrowing
initially shall be the date on which such Borrowing is made and thereafter shall
be the effective date of the most recent conversion or continuation of such
Borrowing.
"Investment" means, for any Person, (a) the acquisition (whether
for cash, property, services or securities) of capital stock, bonds, notes,
debentures, partnership or other ownership interests or other securities of any
other Person or any agreement to make any such acquisition (including, without
limitation, any "short sale" or any sale of any securities at a time when such
securities are not owned by the Person entering into such sale), (b) the making
of any deposit with, or advance, loan or other extension of credit to, any other
Person (including the purchase of property from another Person subject to an
understanding or agreement, contingent or otherwise, to resell such property to
such Person), but excluding any such advance, loan or extension of credit having
a term not exceeding 180 days arising in connection with the sale of inventory,
supplies or services by such Person in the ordinary course of business, (c) the
entering into of any Guarantee of, or other contingent obligation with respect
to, Indebtedness or other liability of any other Person and (without
duplication) any amount committed to be advanced, lent or extended to such
Person and (d) the entering into of any Hedging Agreement.
"Iridium Business" means the designing, development, acquisition,
construction, manufacture, installation, leasing, licensing, testing,
completion, delivery, acceptance, activation, operation, maintenance,
restoration, improvement, use and ownership of the Iridium System, the providing
of services in connection with the Iridium System, the financing thereof
(whether through the issuance of debt or equity securities or otherwise) and all
systems, property, businesses, activities and services of the Company and its
Subsidiaries related thereto or to any Related Business.
"Iridium Capital" means Iridium Capital Corporation, a Delaware
corporation.
"Iridium LLC" means Iridium LLC, a Delaware limited liability
company.
"Iridium LLC Agreement" means the Limited Liability Company
Agreement of Iridium LLC dated as of July 29, 1996, pursuant to which Iridium
LLC is organized.
"Iridium LLC Members" means each of the holders from time to time
of membership interests of Iridium LLC.
"Iridium System" means the IRIDIUM(R) global wireless
communications system described in the Information Memorandum.
"IWCL" means Iridium World Communications Ltd., a Bermuda company.
"Kyocera" means Kyocera Corporation, a Japanese corporation.
Senior Secured Credit Agreement
<PAGE> 20
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"Lenders" means the Persons listed on Schedule I and any
other Person that shall have become a party hereto pursuant to an Assignment and
Acceptance, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Acceptance.
"LIBO Rate" means, with respect to any Eurodollar Borrowing for
any Interest Period, the rate appearing on Page 3750 of the Telerate Service
(or on any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to Dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for Dollar deposits with a
maturity comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the LIBO Rate with respect to such
Eurodollar Borrowing for such Interest Period shall be the rate at which Dollar
deposits of $5,000,000 and for a maturity comparable to such Interest Period are
offered by the principal London office of the Administrative Agent in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period.
"License Subsidiary" means any Subsidiary of the Company
established for the purpose of holding a Telecommunications Approval pursuant to
Section 6.12(a).
"Lien" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security interest in,
on or of such asset and (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset.
"LLC Agreements" means the Company LLC Agreement and the Iridium
LLC Agreement.
"Loans" means the loans made by the Lenders to the Company
pursuant to this Agreement.
"Loss Proceeds" means, with respect to any Event of Loss,
insurance proceeds, condemnation awards (including, without limitation,
Condemnation Proceeds) or other compensation, awards, damages and other payments
or relief (exclusive, in each case, of the proceeds of liability insurance and
business interruption insurance and other payments for interruption of
operations) with respect to any Event of Loss.
"Management Services Agreement" means the Amended and Restated
Management Services Agreement dated as of December 18, 1997 among, Iridium World
Communications Ltd., Iridium LLC and the Company with respect to the provision
of management, personnel and administrative services by Iridium LLC to the
Company.
"Margin Stock" means "margin stock" within the meaning of
Regulations T, U and X of the Board.
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"Material Adverse Effect" means a material adverse effect on (a)
the business, operations, assets, condition (financial or otherwise) or
prospects of the Company and any of its Subsidiaries taken as a whole, (b) the
ability of the Credit Parties (taken as a whole) to perform their respective
obligations under any Credit Document to which any of them is a party, (c) the
validity or enforceability of the Liens under any Security Document or on the
Collateral thereunder or the validity or enforceability of the Credit Documents,
(d) the ability of Motorola to perform its obligations under any Motorola
Agreement or Principal Project Document to which it is a party or (e) the
operation of the Iridium System.
"Maturity Date" means December 29, 2000.
"Memorandum of Understanding" means the Second Amended and
Restated Memorandum of Understanding dated as of December 23, 1998 among
Motorola, Iridium LLC and the Company, amending and restating the Amended and
Restated Memorandum of Understanding dated as of May 11, 1998 among Motorola,
Iridium LLC and the Company, amending and restating the Memorandum of
Understanding dated as of July 11, 1997 between Motorola and Iridium LLC.
"Moody's" means Moody's Investors Service, Inc. (or any successor
to the rating business thereof).
"Mortgaged Properties" has the meaning assigned to such term in
Section 6.10.
"Mortgages" means, collectively, one or more instruments of
mortgages, deeds of trust or similar instruments in favor of the Collateral
Agent (and/or one or more trustees or other Persons designated therein), in form
and substance satisfactory to the Administrative Agent, executed and delivered
by the Company or one of its Subsidiaries pursuant to Article IV or Section
6.10.
"Motorola" means Motorola, Inc., a Delaware corporation.
"Motorola Agreements" means, collectively, the Motorola Consent,
the Motorola Pledge Agreement and the Motorola Guarantee (if any).
"Motorola Consent" means the Consent and Agreement substantially
in the form of Exhibit G between Motorola, the Company, the Administrative Agent
and the Collateral Agent.
"Motorola Default" means any Event of Default under Section 9.02.
"Motorola Domestic Subsidiary" means any Subsidiary of Motorola,
except any such Subsidiary (a) that neither transacts any substantial business
nor regularly maintains any substantial portion of its fixed assets within the
United States of America or (b) which is engaged primarily in financing
operations of Motorola or its Subsidiaries outside the United States of America.
"Motorola Guarantee" has the meaning assigned to such term in
Section 8.09(a).
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"Motorola Guarantee Obligation" means the obligation of Motorola
contained in (and subject to the terms and conditions of) the Memorandum of
Understanding to provide an additional guarantee or guarantees in a maximum
amount of $350,000,000 (inclusive of principal, interest and other amounts) in
respect of borrowings of the Company.
"Motorola Guaranteed Credit Agreement" means the Senior Guaranteed
Credit Agreement dated as of the date hereof between the Company, the lenders
party thereto, Chase Securities Inc. and Barclays Capital, as global lead
arrangers in connection therewith, Chase as the administrative agent and
Barclays Capital as the documentation agent thereunder, providing for loans in
an aggregate original principal amount not exceeding $750,000,000 as of the date
hereof.
"Motorola Pledge Agreement" means the Pledge Agreement
substantially in the form of Exhibit H between Motorola and the Collateral
Agent.
"Motorola's Net Worth" has the meaning assigned to such term in
clause (g) of Section 9.02.
"Motorola Obligations" means (a) the Company's financial
obligations in respect of any and all claims and rights by Motorola against the
Company arising as a result of Motorola's performance of its obligations under
any guarantee issued by Motorola in respect of Indebtedness of the Company
(including, without limitation, (i) the Guarantee Agreement executed and
delivered by Motorola in connection with the Motorola Guaranteed Credit
Agreement, (ii) the Motorola Guarantee and (iii) any other guarantee issued by
Motorola in respect of any Indebtedness permitted under Section 7.01(c) or (d)),
whether by subrogation, contribution, reimbursement or otherwise, and including,
without limitation, any and all monetary obligations owing by the Company in
respect of any of the foregoing under the MOU Agreements (but excluding, for
avoidance of doubt, the obligations under the Agreement Regarding Guarantee
relating to compensation in the form of equity interests of Iridium LLC or IWCL
or warrants therefor), and (b) any and all obligations owing by the Company to
Motorola in respect of any Motorola Vendor Financing.
"Motorola Vendor Financing" means (a) the Deferred O&M Amounts,
(b) the FOC Payments (as defined in the Memorandum of Understanding) to the
extent that a deferral thereof is made pursuant to Section 8 thereof and (c) any
other deferral of payment or other financing for more than 120 days provided by
Motorola or any of its Subsidiaries after the Closing Date to the Company or any
of its Subsidiaries in respect of any goods, property or services provided under
any Principal Project Document.
"MOU Agreements" means the Memorandum of Understanding and the
Agreement Regarding Guarantee.
"Multiemployer Plan" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"Net Available Proceeds" means:
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(a) in the case of any Disposition, the amount of Net Cash
Payments received by the Company and its Subsidiaries in connection with
such Disposition;
(b) in the case of any Event of Loss, the aggregate amount of the
Loss Proceeds received by the Company and its Subsidiaries in respect of
such Event of Loss, net of reasonable expenses incurred by the Company
and its Subsidiaries in connection therewith;
(c) in the case of any Equity Issuance, the aggregate amount of
all cash received by the Company and its Subsidiaries in respect of such
Equity Issuance, net of reasonable expenses incurred by the Company and
its Subsidiaries in connection therewith;
(d) in the case of any Debt Incurrence, the aggregate amount of
all cash received by the Company and its Subsidiaries in respect of such
Debt Incurrence, net of reasonable expenses incurred by the Company and
its Subsidiaries in connection therewith; and
(e) in the case of any Project Document Claim, the aggregate
amount of all cash received by the Company and its Subsidiaries in
respect of such Project Document Claim, net of reasonable expenses
incurred by the Company and its Subsidiaries in connection with the
collection thereof.
"Net Cash Payments" means, with respect to any Disposition, the
aggregate amount of all cash payments received by the Company and its
Subsidiaries directly or indirectly in connection with such Disposition (or
thereafter received in respect of any non-cash consideration paid to the Company
or any of its Subsidiaries in connection with such Disposition); provided that
Net Cash Payments shall be net of (a) the amount of any legal, title and
recording tax expenses, commissions and other fees and expenses paid or payable
by the Company and its Subsidiaries in connection with such Disposition and (b)
any repayments (and any reasonable expenses in connection therewith) by the
Company or any of its Subsidiaries of Indebtedness to the extent that (i) such
Indebtedness is secured by a Lien on the property that is the subject of such
Disposition and (ii) the transferee of (or holder of a Lien on) such property
requires that such Indebtedness be repaid as a condition to the purchase of such
property.
"O&M Contract" means the Operations and Maintenance Contract,
effective July 29, 1993, between Motorola and the Company (as transferee of
Iridium LLC).
"Operation and Maintenance Expenses" means, for any period, the
sum, computed without duplication, of the following: all (a) expenses of
administering and operating the Iridium Business and of maintaining it in good
repair and operating condition payable during such period plus (b) direct
operating and maintenance costs of the Iridium Business (including, without
limitation, all payments due and payable under the O&M Contract, the Terrestrial
Network Development Contract and other relevant Project Documents) payable
during such period, plus (c) insurance costs of the Company and its Subsidiaries
during such period, plus (d) property taxes due and payable by the Company and
its Subsidiaries during such period, plus (e) sales, use and excise taxes, value
added taxes, taxes on telecommunications services and other similar taxes due
and payable by the Company and its Subsidiaries during such period, plus (f)
franchise taxes due and payable by the Company and its Subsidiaries during such
period, plus
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19
(g) income Taxes due and payable by the Company and its Subsidiaries during such
period, plus (h) costs and fees incurred by the Company and its Subsidiaries in
connection with obtaining and maintaining in effect the Government Approvals
during such period, plus (i) legal, accounting, engineering and other
professional fees incurred in connection with any of the foregoing items during
such period, plus (j) marketing and sales expenses (including associated
commissions) of the Company and its Subsidiaries during such period, plus (k)
general and administrative expenses of the Company and its Subsidiaries for such
period, plus (l) all fees payable to the Agents, the Global Lead Arrangers or
the Lenders or any of their respective Affiliates hereunder or in connection
with the transactions contemplated hereby during such period, plus (m) Capital
Expenditures during such period, plus (n) all payments due and payable by the
Company to Iridium LLC under the Management Services Agreement.
"Other Project Document" means any contract or other written
agreement (other than the Credit Documents and the Principal Project Documents)
entered into or assumed by the Company or any of its Subsidiaries with respect
to the Iridium Business, including, without limitation, the Management Services
Agreement.
"Other Taxes" means any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made under any Credit Document or from the
execution, delivery or enforcement of, or otherwise with respect to, any Credit
Document.
"Parent Security Agreement" means a Pledge and Security Agreement
substantially in the form of Exhibit C between Iridium LLC and the
Administrative Agent.
"PBGC" means the Pension Benefit Guaranty Corporation referred to
and defined in ERISA and any successor entity performing similar functions.
"Permitted Investments" means:
(a) direct obligations of, or obligations guaranteed by, the
United States of America for the payment of which obligations or
guarantee the full faith and credit of the United States of America is
pledged and which have a remaining Average Life of not more than 365 days
from the date of acquisition thereof;
(b) investments in commercial paper maturing not more than 270
days after the date of acquisition thereof and having, at such date of
acquisition, a credit rating of at least P-1 from S&P or A-1 from Moody's
(or such similar equivalent rating by at least one "nationally recognized
statistical rating organization" (as defined in Rule 436 under the
Securities Act of 1933, as amended));
(c) investments in certificates of deposit, banker's acceptances
and time deposits maturing not more than 270 days after the date of
acquisition thereof issued or guaranteed by or placed with, and money
market deposit accounts issued or offered by, any commercial bank or
trust company organized under the laws of the United States of America or
any State thereof or any other country which is a member of the
Organization for Economic Cooperation and Development, in each case which
has a combined capital,
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20
surplus and undivided profits of not less than $500,000,000 or its
equivalent in foreign currency, and whose debt is rated at least
A- by S&P or A-3 by Moody's (or such similar equivalent rating by
a "nationally recognized statistical rating organization" (as
defined above));
(d) repurchase obligations with a term of not more than 7
days for securities described in clause (a) of this definition and
entered into with a financial institution which has a combined
capital, surplus and undivided profits of not less than
$500,000,000 or its equivalent in foreign currency, and whose debt
is rated at least A- by S&P or A-3 by Moody's (or such similar
equivalent rating by a "nationally recognized statistical rating
organization" (as defined above)); and
(e) any mutual or similar fund investing exclusively in
Permitted Investments of the type described in clauses (a), (b),
(c) and/or (d) above.
"Permitted Liens" means:
(a) Liens created pursuant to the Security Documents;
(b) until (and including) the Closing Date, Liens created
pursuant to the Existing Secured Credit Agreement and the security
documents referred to therein;
(c) Liens imposed by any Government Authority for taxes,
assessments or charges not yet due or that are being contested in
good faith and by appropriate proceedings if, in the opinion of
the Company, adequate reserves with respect thereto are maintained
on the books of the Company or the affected Subsidiary, as the
case may be, in accordance with GAAP;
(d) carriers', warehousemen's, mechanics', materialmen's,
repairmen's, landlords' or other like Liens arising in the
ordinary course of business that are not overdue for a period of
more than 30 days or that are being contested in good faith and by
appropriate proceedings;
(e) Liens securing judgments but only to the extent for an
amount and for a period not resulting in an Event of Default;
(f) pledges or deposits under worker's compensation,
unemployment insurance and other social security legislation;
(g) deposits to secure the performance of bids, trade
contracts (other than for Indebtedness), leases, utilities,
statutory obligations, surety and appeal bonds, performance bonds
and other obligations of a like nature incurred in the ordinary
course of business;
(h) easements, rights-of-way, restrictions and other
similar encumbrances incurred in the ordinary course of business
and encumbrances consisting of zoning restrictions, easements,
licenses, restrictions on the use of property or minor defects,
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irregularities or imperfections in title, and encumbrances and
statutory Liens, that, in the aggregate, are not material in
amount, and that do not in any case materially detract from the
value of the property subject thereto or interfere with the
ordinary conduct of the business of the Company and its
Subsidiaries;
(i) Liens in favor of any Government Authority to secure
progress, advance or other payments, or pursuant to any contract,
license, permit or provision of any statute;
(j) bankers' Liens arising out of or with respect to the
credit balance maintained by the Company in one or more deposit
accounts;
(k) Liens on Property to secure the payment of all or any
part of the purchase price or construction cost thereof or to
secure any Indebtedness incurred prior to, at the time of, or
within 180 days after, the acquisition of such Property, the
completion of any construction or the commencement of full
operation, for the purpose of financing all or any part of the
purchase price or construction cost thereof, provided that such
Lien shall not apply to any other property or asset of the Company
or its Subsidiaries;
(l) any Lien on any property or asset of the Company or any
of its Subsidiaries existing on the date hereof and set forth in
Schedule VI; provided that (i) such Lien shall not apply to any
other property or asset of the Company or any of its Subsidiaries
and (ii) such Lien shall secure only those obligations which it
secures on the date hereof (and any Refinancing of such
obligations provided the amount secured by such Lien shall not
exceed the amount of such obligations being Refinanced);
(m) Liens in connection with any Capital Lease Obligation
permitted under Section 7.01(i); and
(n) Liens arising in connection with the Iridium
clearinghouse function (as described in Article IV of the Gateway
Authorization Agreements).
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Government
Authority or other entity.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the U.S. Tax Code or Section 302 of ERISA, and in respect of which the
Company or any ERISA Affiliate is (or, if such plan were terminated, would under
Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5)
of ERISA.
"Post-Default Rate" has the meaning assigned to such term in
Section 2.11(c).
"Prime Rate" means the rate of interest per annum publicly
announced from time to time by Chase as its prime rate in effect at its
principal office in New York City; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.
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"Principal Project Documents" means (a) the Space System Contract,
(b) the O&M Contract, (c) the Terrestrial Network Development Contract, (d) all
Gateway Authorization Agreements and (e) the IBSS Agreement.
"Project Document Claim" means any payment by any Transaction
Party (other than the Company or any of its Subsidiaries) to the Company or any
of its Subsidiaries under any Principal Project Document in respect of
liquidated damages, warranty payments, indemnity payments or other similar
amounts.
"Project Documents" means the Principal Project Documents and the
Other Project Documents.
"Quarterly Dates" means the last day of March, June, September and
December in each year (or, if any such day is not a Business Day, the
immediately preceding Business Day), the first of which shall be the first such
day after the date hereof.
"Real Estate Subsidiary" means any Subsidiary of the Company
established for the purpose of holding title to or a leasehold interest in real
property (including fixtures thereon) pursuant to Section 6.12(b).
"Refinance" means, with respect to any Indebtedness, to refinance,
extend, renew, refund, repay, prepay, redeem, defease or retire, or to issue
Indebtedness in exchange or replacement for such Indebtedness.
"Refinanced" has a meaning correlative to the term "Refinance."
"Refinancing" has a meaning correlative to the term "Refinance."
"Register" has the meaning set forth in Section 11.04(c).
"Related Business" means the business of developing, owning,
engaging in and dealing with all or any part of the business of the provision of
telecommunications services and businesses and (a) reasonably related extensions
thereof, including but not limited to the manufacture, purchase, ownership,
operation, leasing, licensing, financing and selling of, and generally dealing
in or with, communications satellites, earth stations, gateways, ground
infrastructure and subscriber equipment, used or intended for use with
telecommunications services and businesses and (b) any other activities that are
reasonably related to the provision of telecommunications services and
businesses.
"Related Parties" means, with respect to any specified Person,
such Person's Affiliates and the respective directors, officers, employees,
agents and advisors of such Person and such Person's Affiliates.
"Release" means, with respect to any Hazardous Material, any
release, spill, emission, emanation, leaking, pumping, injection, deposit,
disposal, discharge, dispersal, leaching or migration of such Hazardous Material
into the indoor or outdoor environment,
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23
including, without limitation, the movement of such Hazardous Material through
ambient air, soil, surface water, ground water, wetlands, land or subsurface
strata.
"Required Lenders" means, at any time, Lenders having Exposures
representing more than 50% of the sum of the total Exposures at such time.
"Reserve Capital Call Obligations" means the obligations of 17 of
the Iridium LLC Members to purchase up to 18,206,550 of additional Class 1
Interests of Iridium LLC at a price of $13.33 per interest pursuant to Section
4.02 of the Iridium LLC Agreement.
"Responsible Officer" means, with respect to the Company, its
chief executive officer, chief financial officeror general counsel or any senior
vice president of the Company or, with respect to any Borrowing Request and
Sections 2.09(a), 2.09(e), 5.02 and 8.01(d), any vice president of the Company.
"Restoration" has a meaning correlative to the term "Restore."
"Restore" means, with respect to any Affected Property, to
rebuild, repair, restore or replace such Affected Property.
"Restricted Payment" means distributions of the Company (in cash,
property or obligations) on, or other payments on account of, or the setting
apart of money for a sinking or other analogous fund for, or the purchase,
redemption, retirement or other acquisition of, any portion of any membership or
other equity interest in the Company or of any warrants, options or other rights
to acquire any such membership or equity interest (or to make any payments to
any Person where the amount thereof is calculated with reference to fair market
or equity value of the Company or any Subsidiary), but excluding any dividend
payable solely in equity interests of the Company.
"S&P" means the Standard & Poor's Ratings Services, a division of
The McGraw-Hill Companies, Inc. (or any successor to the rating business
thereof).
"SEC" means the Securities and Exchange Commission.
"Second Borrowing Date" has the meaning set forth in Section 2.01.
"Secured Indebtedness" means, as at any date, all Indebtedness of
the Company and its Subsidiaries, on a consolidated basis, that is secured by a
Lien on property of the Company or any of its Subsidiaries, including all
Capital Lease Obligations.
"Secured Parties" means the Agents and the Lenders.
"Security Agreement" means a Pledge and Security Agreement
substantially in the form of Exhibit B between the Company, the Subsidiary
Guarantors and the Collateral Agent.
"Security Documents" means, collectively, the Security Agreement,
the Parent Security Agreement, the Mortgages, the Depositary Agreement, the
Motorola Pledge Agreement,
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the consents and agreements referred to in Section VII of Appendix 1 and all
Uniform Commercial Code financing statements or other filings and/or recordings
required by any thereof to be filed or made, as the case may be, with respect to
the security interests in or Liens on the property created pursuant to any
thereof.
"Senior Note Indentures" means, collectively, the Series A Note
Indenture, the Series B Note Indenture, the Series C Note Indenture and the
Series D Note Indenture.
"Series A Note Indenture" means the Indenture dated as of July 16,
1997 among the Company (as transferee of Iridium LLC), certain of its
Subsidiaries and State Street Bank and Trust Company, as trustee thereunder, in
respect of the Series A Senior Notes.
"Series A Senior Notes" means 13% Senior Notes due 2005, Series A
and Series A/EN issued by Iridium LLC (which has assigned its obligations
thereunder to the Company) and Iridium Capital, as co-obligors, under the Series
A Note Indenture in an aggregate original principal amount of $300,000,000, and
the guarantees thereof pursuant to the Series A Note Indenture.
"Series B Note Indenture" means the Note Indenture dated as of
July 16, 1997 among the Company (as transferee of Iridium LLC), certain of its
Subsidiaries and State Street Bank and Trust Company, as trustee thereunder, in
respect of the Series B Senior Notes.
"Series B Senior Notes" means 14% Senior Notes due 2005,
Series B and Series B/EN issued by Iridium LLC (which has assigned its
obligations thereunder to the Company) and Iridium Capital, as co-obligors,
under the Series B Note Indenture in an aggregate original principal amount of
$500,000,000, and the guarantees thereof pursuant to the Series B Note
Indenture.
"Series C Note Indenture" means the Indenture dated as of October
17, 1997 among the Company (as transferee of Iridium LLC), certain of its
Subsidiaries and State Street Bank and Trust Company, as trustee thereunder, in
respect of the Series C Senior Notes.
"Series C Senior Notes" means 11-1/4% Senior Notes due 2005,
Series C and Series C/EN issued by Iridium LLC (which has assigned its
obligations thereunder to the Company) and Iridium Capital, as co-obligors,
under the Series C Note Indenture in an aggregate original principal amount of
$300,000,000, and the guarantees thereof pursuant to the Series C Note
Indenture.
"Series D Note Indenture" means the Indenture dated as of May 13,
1998 among the Company, certain of its Subsidiaries and State Street Bank and
Trust Company, as trustee thereunder, in respect of the Series D Senior Notes.
"Series D Senior Notes" means 10-7/8% Senior Notes due July 15,
2005, Series D issued by the Company and Iridium Capital, as co-obligors, under
the Series D Note Indenture in an aggregate original principal amount of
$350,000,000, and the guarantees thereof pursuant to the Series D Note
Indenture.
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"SNOC" means the Satellite Network Operations Center for the
Iridium System located in Loudoun County, Virginia.
"Space System Contract" means the Space System Contract, effective
as of July 29, 1993, between the Company (as transferee of Iridium LLC) and
Motorola.
"Statutory Reserve Rate" means a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of which
is the number one minus the aggregate of the maximum reserve percentages
(including any marginal, special, emergency or supplemental reserves) expressed
as a decimal established by the Board to which the Administrative Agent is
subject for eurocurrency funding (currently referred to as "Eurocurrency
Liabilities" in Regulation D of the Board). Such reserve percentages shall
include those imposed pursuant to such Regulation D. Eurodollar Loans shall be
deemed to constitute eurocurrency funding and to be subject to such reserve
requirements without benefit of or credit for proration, exemptions or offsets
that may be available from time to time to any Lender under such Regulation D or
any comparable regulation. The Statutory Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.
"Subsidiary" means, with respect to any Person (the "parent") at
any date, any corporation, limited liability company, partnership, association
or other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership, association or other
entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or, in the
case of a partnership, more than 50% of the general partnership interests are,
as of such date, owned, controlled or held, or (b) that is, as of such date,
otherwise Controlled, by the parent or one or more subsidiaries of the parent or
by the parent and one or more subsidiaries of the parent. Unless otherwise
specified, "Subsidiary" means a subsidiary of the Company. Notwithstanding the
foregoing, in no event shall the Company be a Subsidiary of Motorola.
"Subsidiary Guarantee Agreement" means a Subsidiary Guarantee
Agreement substantially in the form of Exhibit D between one or more Subsidiary
Guarantors and the Administrative Agent.
"Subsidiary Guarantee Assumption Agreement" means a Guarantee
Assumption Agreement substantially in the form of Exhibit E by an entity that,
pursuant to Section 6.11, is required to become a "Subsidiary Guarantor"
hereunder in favor of the Administrative Agent.
"Subsidiary Guarantor" means, as of the date hereof, each
Subsidiary identified in Schedule VII and, thereafter, each other Subsidiary
which becomes a Subsidiary Guarantor in accordance with Section 6.11.
"Taxes" means, with respect to any Person, all taxes,
withholdings, assessments, imposts, duties, governmental fees, governmental
charges or levies imposed directly or indirectly on such Person or its income,
profits or property by any Government Authority.
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"Telecommunications Approvals" means all Government Approvals of
any applicable telecommunications authority (including all local and national
telecommunications approvals and licenses, including FCC licenses, and
compliance with International Telecommunication Union procedures and
requirements) relating to the Iridium Business, including, without limitation,
for spectrum allocation, Ka-band, L-band, interconnection, type approval,
trans-border roaming and other business operations of the Company and its
Subsidiaries.
"Terrestrial Network Development Contract" means the Terrestrial
Network Development Contract, effective January 1, 1993, between the Company (as
transferee of Iridium LLC) and Motorola.
"Total Indebtedness" means all Indebtedness of the Company and its
Subsidiaries on a consolidated basis (without duplication).
"Total Invested Capital" means, as at any date of determination,
the sum of (a) Total Indebtedness as of such date and (b) $1,983,000,000 plus
the aggregate proceeds received by the Company or its Subsidiaries in respect of
any Equity Issuance, including the fair value of property other than cash (as
determined in good faith by the board of directors of the Company in a
resolution delivered to the Administrative Agent), minus any redemptions of, or
dividends or other distributions on, the membership interests of the Company
(other than (i) any Restricted Payments referred to in Section 7.07(a) or (ii)
any dividend or distribution in membership interests of the Company) made after
the Closing Date and on or prior to the date of determination.
"Total Satellite Subscribers" means, as at any date of
determination, the total number of "8816" and "8817" numbers that have been
issued to subscribers to any of the Iridium voice services (excluding paging).
"Total Subscribers" means, as at any date of determination, the
total subscribers to any of the Iridium services.
"Transaction Documents" means the Credit Documents, the Project
Documents and the LLC Agreements.
"Transaction Party" means each Person (other than a Secured Party)
from time to time party to a Transaction Document.
Trigger Event" means the occurrence of any of the following
events, if any such event occurs prior to the earlier of the Guarantee
Obligation Termination Date or the Guarantee Obligation Release Date: (a) any
Event of Default; (b) failure by the Company to receive at least $150,000,000
(less reasonable underwriting fees) in cash of aggregate proceeds of Equity
Issuances (other than resulting from the exercise of the Reserve Capital Call
Obligations) after the Closing Date and prior to February 28, 1999; or (c)
failure of Cumulative Adjusted Accrued Revenues as at the last day of any month
specified below to be in an aggregate amount of at least the amount set forth
opposite such month below:
Senior Secured Credit Agreement
<PAGE> 32
27
<TABLE>
<CAPTION>
Minimum Cumulative
-------------------------
Month (1999) Adjusted Accrued Revenues
----- -------------------------
<S> <C>
February $25,000,000
March 45,000,000
April 75,000,000
May 115,000,000
June 200,000,000
July 300,000,000
August 425,000,000
</TABLE>
"Type", when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate
Base Rate.
"U.S. Bankruptcy Code" means the United States Federal Bankruptcy
Code of 1978, as amended from time to time.
"U.S. Tax Code" means the Internal Revenue Code of 1986, as
amended from time to time.
"Use" means, with respect to any Hazardous Material and with
respect to any Person, the generation, manufacture, processing, distribution,
handling, use, treatment, recycling or storage of such Hazardous Material or
transportation to or from the property of such Person of such Hazardous
Material.
"Wholly Owned Subsidiary" means, with respect to any Person, any
Subsidiary all of the capital stock or other equity interests of which are owned
by such Person (other than, in the case of a corporation, directors' qualifying
shares and shares or equity interests required to be held by foreign nationals,
in each case to the extent mandated by applicable law).
"Withdrawal Liability" means liability to a Multiemployer Plan as
a result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.
"Working Capital" means, for any Person, Current Assets (other
than cash and cash equivalents) minus Current Liabilities (other than the
current portion of long-term Indebtedness).
SECTION 1.02. Classification of Loans and Borrowings. For purposes
of this Agreement, Loans may be classified and referred to by Type (e.g., a
"Eurodollar Loan" or an "ABR Loan"). Borrowings also may be classified and
referred to by Type (e.g., a "Eurodollar Borrowing" or an "ABR Borrowing").
Senior Secured Credit Agreement
<PAGE> 33
28
SECTION 1.03. Terms Generally. The definitions of terms herein
shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
The word "will" shall be construed to have the same meaning and effect as the
word "shall". Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified, including an amendment
and restatement thereof, but subject to any restrictions on such amendments,
supplements or modifications set forth herein, (b) any reference herein to any
Person shall be construed to include such Person's successors and assigns or, in
the case of any Government Authority, any entity succeeding to any or all of the
functions of such Government Authority, (c) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.
SECTION 1.04. Accounting Terms; GAAP. Except as otherwise
expressly provided herein, all terms of an accounting or financial nature shall
be construed in accordance with GAAP, as in effect from time to time; provided
that, if the Company notifies the Administrative Agent that the Company requests
an amendment to any provision hereof to eliminate the effect of any change
occurring after the date hereof in GAAP or in the application thereof on the
operation of such provision (or if the Administrative Agent notifies the Company
that the Required Lenders request an amendment to any provision hereof for such
purpose), regardless of whether any such notice is given before or after such
change in GAAP or in the application thereof, then such provision shall be
interpreted on the basis of GAAP as in effect and applied immediately before
such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.
ARTICLE II
THE CREDITS
SECTION 2.01. The Commitments. Subject to the satisfaction of the
conditions precedent set forth in Article IV, the Company agrees to request, and
each Lender agrees to make, a Loan or Loans in an aggregate amount equal to such
Lender's Commitment, comprising one ABR Borrowing on the Closing Date in an
aggregate principal amount (among all Lenders) not less than $500,000,000 and
one ABR or Eurodollar Borrowing on a date (the "Second Borrowing Date") selected
by the Company and occurring on or prior to the Commitment Termination Date in
an aggregate principal amount (among all Lenders) equal to the unused amount of
the total Commitments (if any). The Company shall notify each Lender of the
Second Borrowing Date by delivering a Borrowing Request to the Administrative
Agent in accordance with Section 2.03. Amounts prepaid in respect of Loans may
not be reborrowed.
Senior Secured Credit Agreement
<PAGE> 34
29
SECTION 2.02. Loans and Borrowings.
(a) Each Loan shall be made as part of a Borrowing consisting of
Loans of the same Type made by the applicable Lenders ratably in accordance with
their respective Commitments. The failure of any Lender to make any Loan
required to be made by it shall not relieve any other Lender of its obligations
hereunder; provided that the Commitments of the Lenders are several and no
Lender shall be responsible for any other Lender's failure to make Loans as
required.
(b) Subject to Section 2.12, each Borrowing shall be comprised
entirely of ABR Loans or Eurodollar Loans as the Company may request in
accordance herewith. Each Lender at its option may make any Eurodollar Loan by
causing any domestic or foreign branch or affiliate of such Lender to make such
Loan; provided that any exercise of such option shall not affect the obligation
of the Company to repay such Loan or any additional amount with respect thereto
in accordance with the terms of this Agreement.
(c) At the commencement of each Interest Period for any Eurodollar
Borrowing, such Borrowing shall be in an aggregate principal amount of
$10,000,000 or a larger multiple of $1,000,000. At the time that each ABR
Borrowing is made, such Borrowing shall be in an aggregate principal amount
equal to $10,000,000 or a larger multiple of $1,000,000; provided that an ABR
Borrowing may be in an aggregate principal amount that is equal to the entire
unused amount of the total Commitments. Borrowings of more than one Type may be
outstanding at the same time; provided that there shall not at any time be more
than a total of twelve Eurodollar Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement, the
Company shall not be entitled to request, or to elect to convert or continue,
any Borrowing if the Interest Period requested with respect thereto would end
after the Maturity Date.
SECTION 2.03. Requests for Borrowings. To request a Borrowing, the
Company shall notify the Administrative Agent of such request by telephone (a)
in the case of a Eurodollar Borrowing, not later than 10:00 a.m., New York City
time, three Business Days before the date of the proposed Borrowing or (b) in
the case of an ABR Borrowing, not later than 10:00 a.m., New York City time, the
date of the proposed Borrowing. Each such telephonic Borrowing Request shall be
irrevocable and shall be confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Borrowing Request signed by a Responsible
Officer. Each such telephonic and written Borrowing Request shall specify the
following information in compliance with Section 2.02:
(i) the aggregate principal amount of the requested Borrowing;
(ii) the date of such Borrowing, which shall be a Business Day;
(iii) whether such Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing; and
Senior Secured Credit Agreement
<PAGE> 35
30
(iv) in the case of a Eurodollar Borrowing, the initial Interest
Period to be applicable thereto, which shall be a period contemplated by the
definition of the term "Interest Period".
If no election as to the Type of Borrowing is specified, then the
requested Borrowing shall be an ABR Borrowing. If no Interest Period is
specified with respect to any requested Eurodollar Borrowing, then the Company
shall be deemed to have selected an Interest Period of one month's duration.
Promptly following receipt of a Borrowing Request in accordance with this
Section, the Administrative Agent shall advise each Lender and the Collateral
Agent of the details thereof and of the amount of such Lender's Loan to be made
as part of the requested Borrowing.
SECTION 2.04. Funding of Borrowings.
(a) Each Lender shall make each Loan to be made by it hereunder on
the proposed date thereof by wire transfer of immediately available funds by
12:00 noon, New York City time, to the account of the Administrative Agent most
recently designated by it for such purpose by notice to the Lenders. The
Administrative Agent will make such Loans available to the Company by promptly
crediting the amounts so received, in like funds, to the General Receipt &
Disbursement Account.
(b) Unless the Administrative Agent shall have received notice
from a Lender prior to the proposed date of any Borrowing that such Lender will
not make available to the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with paragraph (a) of this Section
and may, in reliance upon such assumption, make available to the Company a
corresponding amount. In such event, if a Lender has not in fact made its share
of the applicable Borrowing available to the Administrative Agent, then the
applicable Lender and the Company severally agree to pay to the Administrative
Agent forthwith on demand such corresponding amount with interest thereon, for
each day from and including the date such amount is made available to the
Company to but excluding the date of payment to the Administrative Agent, at (i)
in the case of such Lender, the Federal Funds Effective Rate or (ii) in the case
of the Company, the interest rate applicable to ABR Loans. If such Lender pays
such amount to the Administrative Agent, then such amount shall constitute such
Lender's Loan included in such Borrowing.
SCTION 2.05. Interest Elections
(a) Each Borrowing initially shall be of the Type specified in the
applicable Borrowing Request, and in the case of a Eurodollar Borrowing, shall
have an initial Interest Period as specified in such Borrowing Request.
Thereafter, the Company may elect to convert such Borrowing to a different Type
or to continue such Borrowing and, in the case of a Eurodollar Borrowing, may
elect Interest Periods therefor, all as provided in this Section. The Company
may elect different options with respect to different portions of the affected
Borrowing, in which case each such portion shall be allocated ratably among the
Lenders holding the Loans comprising such Borrowing, and the Loans comprising
each such portion shall be considered a separate Borrowing.
Senior Secured Credit Agreement
<PAGE> 36
31
(b) To make an election pursuant to this Section, the Company
shall notify the Administrative Agent of such election by telephone by the time
that a Borrowing Request would be required under Section 2.03 if the Company
were requesting a Borrowing of the Type resulting from such election to be made
on the effective date of such election. Each such telephonic Interest Election
Request shall be irrevocable and shall be confirmed promptly by delivery or
telecopy to the Administrative Agent of a written Interest Election Request in a
form approved by the Administrative Agent and signed by the Company.
(c) Each telephonic and written Interest Election Request shall
specify the following information in compliance with Section 2.02:
(i) the Borrowing to which such Interest Election Request applies
and, if different options are being elected with respect to different
portions thereof, the portions thereof to be allocated to each resulting
Borrowing (in which case the information to be specified pursuant to
clauses (iii) and (iv) of this paragraph shall be specified for each
resulting Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR Borrowing or
a Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of the
term "Interest Period".
If any such Interest Election Request requests a Eurodollar
Borrowing but does not specify an Interest Period, then the Company shall be
deemed to have selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election Request,
the Administrative Agent shall advise each Lender of the details thereof and of
such Lender's portion of each resulting Borrowing.
(e) If the Company fails to deliver a timely Interest Election
Request with respect to a Eurodollar Borrowing prior to the end of the Interest
Period applicable thereto, then, unless such Borrowing is repaid as provided
herein, at the end of such Interest Period such Borrowing shall be converted to
an ABR Borrowing. Notwithstanding any contrary provision hereof, if an Event of
Default has occurred and is continuing and the Administrative Agent, at the
request of the Required Lenders, so notifies the Company, then, so long as an
Event of Default is continuing (i) no outstanding Borrowing may be converted to
or continued as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar
Borrowing shall be converted to an ABR Borrowing at the end of the Interest
Period applicable thereto.
SECTION 2.06. Termination of the Commitments. The Commitments
shall terminate at 5:00 p.m., New York City time, on the Commitment Termination
Date.
Senior Secured Credit Agreement
<PAGE> 37
32
SECTION 2.07. Repayment of Loans; Evidence of Debt.
(a) The Company hereby unconditionally promises to pay to the
Administrative Agent for the account of each Lender the then unpaid principal
amount of each Loan of such Lender on the Maturity Date.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the Company to
such Lender resulting from each Loan made by such Lender, including the amounts
of principal and interest payable and paid to such Lender from time to time
hereunder.
(c) The Administrative Agent shall maintain accounts in which it
shall record (i) the amount of each Loan made hereunder, the Type thereof and
the Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Company to each
Lender hereunder and (iii) the amount of any sum received by the Administrative
Agent hereunder for the account of the Lenders and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraph (b) or (c) of this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that the
failure of any Lender or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the obligation of the Company
to repay the Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Loans made by it be evidenced by a
promissory note. In such event, the Company shall prepare, execute and deliver
to such Lender a promissory note payable to the order of such Lender (or, if
requested by such Lender, to such Lender and its registered assigns) and in a
form approved by the Administrative Agent and the Company.
SECTION 2.08. Optional Prepayment of Loans.
(a) The Company shall have the right at any time and from time to
time to prepay any Borrowing in whole or in part, subject to the requirements of
this Section and provided that each such prepayment that is not a prepayment of
the Loans in whole shall be in an aggregate principal amount not less than
$10,000,000.
(b) Prior to any optional prepayment of Borrowings hereunder, the
Company shall select the Borrowing or Borrowings to be prepaid and shall specify
such selection in the notice of such prepayment pursuant to paragraph (c) of
this Section; provided that each prepayment of Borrowings shall be applied to
prepay any outstanding ABR Borrowings before any Eurodollar Borrowings. If the
Company fails to make a timely selection of the Borrowing or Borrowings to be
prepaid, such prepayment shall be applied, first, to prepay any outstanding ABR
Borrowings and, second, to Eurodollar Borrowings in the order of the remaining
duration of their respective Interest Periods (the Borrowing with the shortest
remaining Interest Period to be prepaid first).
Senior Secured Credit Agreement
<PAGE> 38
33
(c) The Company shall notify the Administrative Agent and the
Collateral Agent by telephone (confirmed by telecopy) of any optional prepayment
hereunder (i) in the case of prepayment of a Eurodollar Borrowing, not later
than 10:00 a.m., New York City time, three Business Days before the date of
repayment or (ii) in the case of prepayment of an ABR Borrowing, not later than
10:00 a.m., New York City time, on the date of prepayment. Each such notice
shall be irrevocable and shall specify the prepayment date and the principal
amount of each Borrowing or portion thereof to be prepaid; provided that a
notice of prepayment delivered by the Company pursuant to this Section may state
that such notice is conditioned upon the effectiveness of other credit
facilities or upon the issuance of other Indebtedness, in which case such notice
may thereafter be revoked by the Company (by notice to the Administrative Agent
on or prior to the specified effective date) if such condition is not satisfied.
Promptly following receipt of any such notice relating to a Borrowing, the
Administrative Agent shall advise the Lenders of the contents thereof. Each
partial prepayment of any Borrowing shall be in an amount that would be
permitted in the case of an advance of a Borrowing as provided in Section 2.02.
Each prepayment of a Borrowing shall be applied ratably to the Loans included in
the prepaid Borrowing. Prepayments shall be accompanied by accrued interest to
the extent required by Section 2.11.
SECTION 2.09. Mandatory Prepayments.
(a) Dispositions. Without limiting the obligation of the Company
to obtain the consent of the Required Lenders pursuant to Section 7.04 to any
Disposition not otherwise permitted hereunder, in the event that the Net
Available Proceeds of any Disposition other than any Excluded Disposition (in
this Section 2.09(a), the "Current Disposition"), and of all prior Dispositions
(other than any Excluded Disposition) as to which no prepayment has yet been
made under this paragraph, shall exceed $5,000,000 then, promptly upon the
occurrence of the Current Disposition, the Company will deliver to the
Administrative Agent a statement, certified by a Responsible Officer, in form
and detail reasonably satisfactory to the Administrative Agent, of the amount of
the Net Available Proceeds of the Current Disposition and of all such prior
Dispositions and, within 30 Business Days after the receipt of the Net Available
Proceeds of the Current Disposition, the Company shall prepay the Loans in an
aggregate amount equal to 100% of the Net Available Proceeds of the Current
Disposition and such prior Dispositions in the manner and to the extent
specified in paragraph (g) of this Section.
(b) Equity Issuance.
(i) Within five Business Days after any Equity Issuance resulting
from the exercise of the Reserve Capital Call Obligations, the Company
shall prepay the Loans in an aggregate amount equal to 100% of the Net
Available Proceeds of such Equity Issuance in the manner and to the
extent specified in paragraph (g) of this Section; and
(ii) Within 30 Business Days after any Equity Issuance (other than
any Excluded Equity Issuance or any Equity Issuance resulting from the
exercise of the Reserve Capital Call Obligations), the Company shall
prepay the Loans in an aggregate amount equal to 50% of the Net Available
Proceeds of such Equity Issuance in the manner and to the extent
specified in paragraph (g) of this Section.
Senior Secured Credit Agreement
<PAGE> 39
34
(c) Debt Incurrence. Without limiting the obligation of the
Company to obtain the consent of the Required Lenders pursuant to Section 7.01
to any incurrence of Indebtedness by the Company or any of its Subsidiaries not
otherwise permitted hereunder, within 30 Business Days after any Debt Incurrence
(other than any Excluded Debt Incurrence), the Company shall prepay the Loans in
an aggregate amount equal to 50% of the Net Available Proceeds of such Debt
Incurrence in the manner and to the extent specified in paragraph (g) of this
Section.
(d) Event of Loss. Within 30 Business Days after receipt of the
Net Available Proceeds of an Event of Loss (other than an Event of Loss (i) as
to which the Net Available Proceeds thereof, together with the Net Available
Proceeds of all previous Events of Loss covered by this clause (i) and not
theretofore applied to either a prepayment hereunder or to the Restoration of
the Affected Property, do not exceed $5,000,000 or (ii) as to which, unless an
Event of Default shall have occurred and be continuing, the Company shall have
notified the Collateral Agent pursuant to Section 4.02(b)(ii) of the Depositary
Agreement that it intends to Restore the Affected Property with respect to such
Event of Loss), the Company shall prepay the Loans in an aggregate amount equal
to 100% of the Net Available Proceeds of such Event of Loss and of such previous
Events of Loss in the manner and to the extent specified in paragraph (g) of
this Section.
(e) Project Document Claims. In the event that the Net Available
Proceeds of any Project Document Claim (in this Section 2.09(e), the "Current
Payment"), and of all prior amounts received by the Company in respect of
Project Document Claims as to which no prepayment has been made under this
paragraph, shall exceed $5,000,000 in the aggregate then, promptly upon the
receipt of the Current Payment, the Company will deliver to the Administrative
Agent a statement, certified by a Responsible Officer, in form and detail
reasonably satisfactory to the Administrative Agent, of the aggregate amount of
the Current Payment and of all such prior payments and, within 30 Business Days
after receipt of the Net Available Proceeds of the Current Payment, will prepay
the Loans in an aggregate amount equal to 100% of the Net Available Proceeds of
the Current Payment and such prior payments in the manner and to the extent
specified in paragraph (g) of this Section.
(f) Excess Cash Flow. Not later than the date 60 days after the
end of each of the first three fiscal quarters of the Company and 120 days after
the end of each fiscal year of the Company (commencing with the fiscal quarter
ending on March 31, 1999), the Company shall prepay the Loans, in the manner and
to the extent specified in paragraph (g) of this Section, in an aggregate amount
equal to (i) 50% of Excess Cash Flow for such fiscal quarter minus (ii) the
aggregate amount of optional prepayments of Loans made during such fiscal
quarter pursuant to Section 2.08.
(g) Application. Prepayments described in the foregoing paragraphs
of this Section shall be applied ratably as among the Loans.
(h) Selection of Borrowings to be Prepaid. Prior to any mandatory
prepayment of Borrowings under this Section, the Company shall select the
Borrowing or Borrowings to be prepaid and shall specify such selection in a
notice to the Administrative Agent not less than three Business Days prior to
the date of such prepayment; provided that each prepayment shall be applied to
prepay any outstanding ABR Borrowings before any Eurodollar Borrowings. If the
Senior Secured Credit Agreement
<PAGE> 40
35
Company fails to make a timely selection of the Borrowing or Borrowings to be
prepaid, such prepayment shall be applied, first, to prepay any outstanding ABR
Borrowings and, second, to Eurodollar Borrowings in the order of the remaining
duration of their respective Interest Periods (the Borrowing with the shortest
remaining Interest Period to be prepaid first).
(i) Payment into Accounts. Nothing in this Section shall be deemed
to limit any obligation of the Company or any of its Subsidiaries hereunder or
under the Depositary Agreement to deposit (or cause to be deposited), promptly
upon receipt, the proceeds in respect of any Disposition, Equity Issuance, Debt
Incurrence, Event of Loss or Project Document Claim in the appropriate Account
in accordance with the Depositary Agreement.
(j) Exclusion from Prepayments. Notwithstanding anything herein to
the contrary, (i) the initial $250,000,000 of aggregate Net Available Proceeds
received from Equity Issuances (other than any Excluded Equity Issuance) after
the Closing Date (the "Excluded Initial Equity Proceeds") and (ii) $250,000,000
of aggregate Net Available Proceeds received from additional Equity Issuances
after the Closing Date and/or from the initial Debt Incurrences (other than any
Excluded Debt Incurrence) after the Closing Date shall not be required to be
applied to prepay the Loans under this Section, provided that the proceeds of
such Equity Issuances and Debt Incurrences so excluded are used, or are
committed to be used (and are actually so used within 180 days of such Equity
Issuance or Debt Incurrence), to pay or reimburse Costs. If prior to the receipt
of $250,000,000 of aggregate Net Available Proceeds under clause (ii) above the
Company shall incur Indebtedness that is guaranteed by Motorola pursuant to
Section 7.01(c), the Net Available Proceeds of such Indebtedness received by the
Company shall be counted toward the $250,000,000 exclusion under said clause
(ii) in an amount equal to the lesser of (x) the aggregate principal amount of
such Indebtedness and (y) $250,000,000 minus the sum of the Net Available
Proceeds under clause (ii) received prior to such incurrence (if any).
SECTION 2.10. Fees.
(a) The Company agrees to pay to the Administrative Agent for the
account of each Lender a commitment fee, which shall accrue at a rate per annum
equal to 4.00% on the average daily unused amount of the Commitment of such
Lender during the period from and including the Closing Date to but excluding
the earlier of (i) the date such Commitment terminates and (ii) the Commitment
Termination Date. Accrued commitment fees shall be payable on each Quarterly
Date and on the earlier of the date the Commitment terminates and the Commitment
Termination Date, commencing on the first such date to occur after the date
hereof. All commitment fees shall be computed on the basis of a year of 360 days
and shall be payable for the actual number of days elapsed (including the first
day but excluding the last day).
(b) The Company agrees to pay to each Agent, for its own account,
fees payable in the amounts and at the times separately agreed upon between the
Company and such Agent.
(c) All fees payable hereunder shall be paid on the due date
thereof, in immediately available funds, to the Administrative Agent for
distribution, in the case of commitment fees, to the Lenders entitled thereto.
Fees paid shall not be refundable under any circumstances.
Senior Secured Credit Agreement
<PAGE> 41
36
SECTION 2.11. Interest.
(a) The Loans comprising each ABR Borrowing shall bear interest at
rate per annum equal to the Alternate Base Rate plus the Applicable Margin.
(b) The Loans comprising each Eurodollar Borrowing shall bear
interest at a rate per annum equal to the Adjusted LIBO Rate for the Interest
Period in effect for such Borrowing plus the Applicable Margin.
(c) Notwithstanding the foregoing, (i) if any principal of any
Loan is not paid when due, whether at stated maturity, upon acceleration, by
mandatory prepayment or otherwise, such overdue amount shall bear interest,
after as well as before judgment, from the due date therefor at a rate per annum
equal to 2% plus the rate otherwise applicable thereto, and (ii) if any interest
on any Loan or any fee or other amount payable by the Company hereunder is not
paid when due, such overdue amount shall bear interest, after as well as before
judgment, from the due date therefor at a rate per annum (the "Post-Default
Rate") equal to 2% plus the rate applicable to ABR Loans as provided in
paragraph (a) of this Section.
(d) Accrued interest on each Loan shall be payable in arrears on
each Interest Payment Date for such Loan and upon termination of the applicable
Commitments; provided that (i) interest accrued pursuant to paragraph (c) of
this Section shall be payable on demand, (ii) in the event of any prepayment of
any Loan (other than a prepayment of an ABR Loan prior to the Maturity Date),
accrued interest on the principal amount prepaid shall be payable on the date of
such prepayment and (iii) in the event of any conversion of any Eurodollar
Borrowing prior to the end of the current Interest Period therefor, accrued
interest on such Loan shall be payable on the effective date of such conversion.
(e) All interest hereunder shall be computed on the basis of a
year of 360 days, except that interest computed by reference to the Alternate
Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall
be computed on the basis of a year of 365 days (or 366 days in a leap year), and
in each case shall be payable for the actual number of days elapsed (including
the first day but excluding the last day). The applicable Alternate Base Rate or
Adjusted LIBO Rate shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error.
SECTION 2.12. Alternate Rate of Interest. If prior to the
commencement of any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination shall
be conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBO Rate for such Interest Period; or
(b) the Administrative Agent is advised by the Required Lenders
that the Adjusted LIBO Rate for such Interest Period will not adequately and
fairly reflect the cost to such Lenders of making or maintaining their Loans
included in such Borrowing for such Interest Period;
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37
then the Administrative Agent shall give notice thereof to the Company and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Company and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective
and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as an ABR Borrowing; provided that if the circumstances
giving rise to such notice affect only one Type of Borrowings, then the other
Type of Borrowings shall be permitted.
SECTION 2.13. Increased Costs.
(a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit
or similar requirement against assets of, deposits with or for the
account of, or credit extended by, any Lender (except any such reserve
requirement reflected in the Adjusted LIBO Rate); or
(ii) impose on any Lender or the London interbank market any other
condition affecting this Agreement or Eurodollar Loans made by such
Lender;
and the result of any of the foregoing shall be to increase the cost to such
Lenders of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to reduce the amount of any sum received or
receivable by such Lender hereunder (whether of principal, interest or
otherwise), then the Company will pay to such Lender such additional amount or
amounts as will compensate such Lender for such additional costs incurred or
reduction suffered.
Without limiting the rights and obligations of the Lenders and the
Company under Section 2.17, if any Lender requests compensation from the Company
under this Section, the Company may, by notice to such Lender (with a copy to
the Administrative Agent), suspend the obligation of such Lender thereafter to
make or continue Eurodollar Loans, or to convert ABR Loans into Eurodollar
Loans, until the Change in Law giving rise to such request ceases to be in
effect; provided that such suspension shall not affect the right of such Lender
to receive the compensation so requested. If the obligation of any Lender to
make Eurodollar Loans or to continue, or to convert ABR Loans into, Eurodollar
Loans shall be suspended pursuant to the preceding sentence, such Lender's
Eurodollar Loans shall be automatically converted into ABR Loans on the last
day(s) of the then current Interest Period(s) for Eurodollar Loans and, unless
and until such Lender gives notice as provided below that the Change in Law is
no longer in effect:
(x) to the extent that such Lender's Eurodollar
Loans have been so converted, all payments and prepayments of
principal that would otherwise be applied to such Lender's
Eurodollar Loans shall be applied instead to its ABR Loans; and
(y) all Loans that would otherwise be made or continued
by such Lender as Eurodollar Loans shall be made or continued
instead as ABR Loans, and all ABR Loans
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of such Lender that would otherwise be converted into Eurodollar
Loans shall remain as ABR Loans.
If such Lender gives notice to the Company with a copy to the Administrative
Agent that the Change in Law that gave rise to the conversion of such Lender's
Eurodollar Loans pursuant to this Section is no longer in effect at a time when
Eurodollar Loans made by other Lenders are outstanding, such Lender's ABR Loans
shall be automatically converted, on the first day(s) of the next succeeding
Interest Period(s) for such outstanding Eurodollar Loans, to the extent
necessary so that, after giving effect thereto, all ABR and Eurodollar Loans are
allocated among the Lenders ratably (as to principal amounts, Types and Interest
Periods) in accordance with their respective Commitments.
(b) If any Lender determines that any Change in Law regarding
capital requirements has or would have the effect of reducing the rate of return
on such Lender's capital or on the capital of such Lender's holding company, if
any, as a consequence of this Agreement or the Loans made by such Lender to a
level below that which such Lender or such Lender's holding company could have
achieved but for such Change in Law (taking into consideration such Lender's
policies and the policies of such Lender's holding company with respect to
capital adequacy), then from time to time the Company will pay to such Lender
such additional amount or amounts as will compensate such Lender or such
Lender's holding company for any such reduction suffered.
(c) A certificate of a Lender setting forth the amount or amounts
necessary to compensate such Lender or its holding company, as the case may be,
as specified in paragraph (a) or (b) of this Section shall be delivered to the
Company and shall be conclusive absent manifest error. The Company shall pay
such Lender the amount shown as due on any such certificate within 10 days after
receipt thereof.
(d) Failure or delay on the part of any Lender to demand
compensation pursuant to this Section shall not constitute a waiver of such
Lender's right to demand such compensation; provided that the Company shall not
be required to compensate a Lender pursuant to this Section for any increased
costs or reductions incurred more than six months prior to the date that such
Lender notifies the Company of the Change in Law giving rise to such increased
costs or reductions and of such Lender's intention to claim compensation
therefor; provided, further, that if the Change in Law giving rise to such
increased costs or reductions is retroactive, then the six-month period referred
to above shall be extended to include the period of retroactive effect thereof.
SECTION 2.14. Break Funding Payments. In the event of (a) the
payment or prepayment of any principal of any Eurodollar Loan other than on the
last day of an Interest Period applicable thereto (including as a result of an
Event of Default or in connection with any mandatory prepayment pursuant to
Section 2.09), (b) the conversion of any Eurodollar Loan other than on the last
day of the Interest Period applicable thereto, (c) the failure to borrow,
convert, continue or prepay any Eurodollar Loan on the date specified in any
notice delivered pursuant hereto (regardless of whether such notice is permitted
to be revocable under Section 2.08(c) and is revoked in accordance herewith), or
(d) the assignment of any Eurodollar Loan other than on the last day of the
Interest Period applicable thereto as a result of a request by
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39
the Company pursuant to Section 2.17, then, in any such event, the Company shall
compensate each Lender for the loss (other than lost profit), cost and expense
attributable to such event. In the case of a Eurodollar Loan, the loss to any
Lender attributable to any such event shall be deemed to include an amount
determined by such Lender to be equal to the excess, if any, of (i) the amount
of interest that such Lender would pay for a deposit equal to the principal
amount of such Loan for the period from the date of such payment, conversion,
failure or assignment to the last day of the then current Interest Period for
such Loan (or, in the case of a failure to borrow, convert or continue, the
duration of the Interest Period that would have resulted from such borrowing,
conversion or continuation) if the interest rate payable on such deposit were
equal to the Adjusted LIBO Rate for such Interest Period, over (ii) the amount
of interest that such Lender would earn on such principal amount for such period
if such Lender were to invest such principal amount for such period at the
interest rate that would be bid by such Lender (or, if not so bid by the Lender,
by an affiliate of such Lender) for Dollar deposits from other banks in the
eurodollar market at the commencement of such period. A certificate of any
Lender setting forth any amount or amounts that such Lender is entitled to
receive pursuant to this Section shall be delivered to the Company and shall be
conclusive absent manifest error. The Company shall pay such Lender the amount
shown as due on any such certificate within 10 days after receipt thereof.
SECTION 2.15. Taxes.
(a) Any and all payments by or on account of any obligation of the
Company hereunder or under any other Credit Document shall be made free and
clear of and without deduction for any Indemnified Taxes or Other Taxes;
provided that if the Company shall be required to deduct any Indemnified Taxes
or Other Taxes from such payments, then (i) the sum payable shall be increased
as necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section) the Administrative
Agent or Lender (as the case may be) receives an amount equal to the sum it
would have received had no such deductions been made, (ii) the Company shall
make such deductions and (iii) the Company shall pay the full amount deducted to
the relevant Government Authority in accordance with any applicable Government
Rule.
(b) In addition, the Company shall pay any Other Taxes to the
relevant Government Authority in accordance with any applicable Government Rule.
(c) The Company shall indemnify the Administrative Agent and each
Lender, within 10 days after written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes
imposed or asserted on or attributable to amounts payable under this Section)
paid by the Administrative Agent or such Lender, as the case may be, and any
penalties, interest and reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Government Authority. A certificate
as to the amount of such payment or liability delivered to the Company by a
Lender, or by the Administrative Agent on its own behalf or on behalf of a
Lender, shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes
or Other Taxes by the Company to a Government Authority, the Company shall
deliver to the
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40
Administrative Agent the original or a certified copy of a
receipt issued by such Government Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
(e) Each Foreign Lender shall (i) deliver to the Company and the
Administrative Agent (x) on or before the date on which it becomes a Lender (A)
(1) two properly completed and duly executed copies of United States Internal
Revenue Service Form 1001 or 4224 (or successor applicable form, as the case may
be) claiming complete exemption from United States withholding tax with respect
to payments by the Company under this Agreement and the other Credit Documents
and (2) a duly completed United States Internal Revenue Service Form W-8 or W-9
certifying that such Lender is entitled to an exemption from United States
backup withholding tax or (B), in the case of a Lender not treated as a bank for
regulatory, tax or other legal purposes in any jurisdiction, (1) a certificate
under penalties of perjury that such Lender is not (x) a bank, a shareholder of
the Company or a controlled foreign corporation related to the Company for
purposes of section 881(c)(3) of the Code or (y) a conduit entity within the
meaning of United States Treasury Regulations section 1.881-3 and (2) two duly
completed Internal Revenue Service Forms W-8, and (y) two further copies of any
such form or certification on or before the date that any such form or
certification expires or becomes obsolete and after the occurrence of any event
requiring a change in the most recent form previously delivered; and (ii) obtain
such extensions of time for filing and complete such forms or certifications as
may reasonably be requested by the Company or the Administrative Agent;
provided, however, that the Lender shall not be required to perform the
obligations under this paragraph if any change in treaty, law or regulation has
occurred prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would prevent such
Lender from duly completing and delivering any such form with respect to it and
such Lender so advises the Company and the Administrative Agent.
SECTION 2.16. Payments Generally; Pro Rata Treatment; Sharing of
Set-offs.
(a) The Company shall make each payment required to be made by it
hereunder (whether of principal, interest or fees, or under Section 2.13, 2.14
or 2.15, or otherwise) or under any other Credit Document (except to the extent
otherwise provided therein) prior to 1:00 p.m., New York City time, on the date
when due, in immediately available funds, without set-off or counterclaim. Any
amounts received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at its offices at 270 Park Avenue, New
York, New York, except as otherwise expressly provided in the relevant Credit
Document, and except that payments pursuant to Sections 2.13, 2.14, 2.15 and
11.03 shall be made directly to the Persons entitled thereto. The Administrative
Agent shall distribute any such payments received by it for the account of any
other Person to the appropriate recipient promptly following receipt thereof. If
any payment hereunder shall be due on a day that is not a Business Day, the date
for payment shall be extended to the next succeeding Business Day and, in the
case of any payment accruing interest, interest thereon shall be payable for the
period of such extension. All payments hereunder or under any other Credit
Document (except to the extent otherwise provided therein) shall be made in
Dollars.
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(b) If at any time insufficient funds are received by and
available to the Administrative Agent to pay fully all amounts of principal,
interest and fees then due hereunder, such funds shall be applied (i) first, to
pay interest and fees then due hereunder, ratably among the parties entitled
thereto in accordance with the amounts of interest and fees then due to such
parties, and (ii) second, to pay principal then due hereunder, ratably among the
parties entitled thereto in accordance with the amounts of principal then due to
such parties.
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Loans resulting in such Lender receiving payment of a
greater proportion of the aggregate amount of its Loans and accrued interest
thereon than the proportion received by any other Lender, then the Lender
receiving such greater proportion shall purchase (for cash at face value)
participations in the Loans of other Lenders to the extent necessary so that the
benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Loans; provided that (i) if any such participations are
purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by the Company pursuant to and in accordance with the express terms of this
Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans to any assignee or
participant, other than to the Company or any Subsidiary or Affiliate thereof
(as to which the provisions of this paragraph shall apply). The Company consents
to the foregoing and agrees, to the extent it may effectively do so under
applicable Government Rule, that any Lender acquiring a participation pursuant
to the foregoing arrangements may exercise against the Company rights of set-off
and counterclaim with respect to such participation as fully as if such Lender
were a direct creditor of the Company in the amount of such participation.
(d) Unless the Administrative Agent shall have received notice
from the Company prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders hereunder that the Company
will not make such payment, the Administrative Agent may assume that the Company
has made such payment on such date in accordance herewith and may, in reliance
upon such assumption, distribute to the Lenders the amount due. In such event,
if the Company has not in fact made such payment, then each of the Lenders
severally agrees to repay to the Administrative Agent forthwith on demand the
amount so distributed to such Lender with interest thereon, for each day from
and including the date such amount is distributed to it to but excluding the
date of payment to the Administrative Agent, at the Federal Funds Effective
Rate.
(e) If any Lender shall fail to make any payment required to be
made by it pursuant to Section 2.04(b) or 2.16(d), then the Administrative Agent
may, in its discretion (notwithstanding any contrary provision hereof), apply
any amounts thereafter received by the Administrative Agent for the account of
such Lender to satisfy such Lender's obligations under such Sections until all
such unsatisfied obligations are fully paid.
SECTION 2.17. Mitigation Obligations; Replacement of Lenders.
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(a) If any Lender requests compensation under Section 2.13, or if
the Company is required to pay any additional amount to any Lender or any
Government Authority for the account of any Lender pursuant to Section 2.15,
then such Lender shall use reasonable efforts to designate a different lending
office for funding or booking its Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates, if, in
the judgment of such Lender, such designation or assignment (i) would eliminate
or reduce amounts payable pursuant to Section 2.13 or 2.15, as the case may be,
in the future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. The Company
hereby agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.
(b) If any Lender requests compensation under Section 2.13, or if
the Company is required to pay any additional amount to any Lender or any
Government Authority for the account of any Lender pursuant to Section 2.15, or
if any Lender defaults in its obligation to fund Loans hereunder, then the
Company may, at its sole expense, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 11.04), all its interests, rights and obligations under this Agreement
to an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that (i) the Company
shall have received the prior written consent of the Administrative Agent, which
consent shall not unreasonably be withheld, (ii) such Lender shall have received
payment of an amount equal to the outstanding principal of its Loans, accrued
interest thereon, accrued fees and all other amounts payable to it hereunder,
from the assignee (to the extent of such outstanding principal and accrued
interest and fees) or the Company (in the case of all other amounts) and (iii)
in the case of any such assignment resulting from a claim for compensation under
Section 2.13 or payments required to be made pursuant to Section 2.15, such
assignment will result in a reduction in such compensation or payments. A Lender
shall not be required to make any such assignment and delegation if, prior
thereto, as a result of a waiver by such Lender or otherwise, the circumstances
entitling the Company to require such assignment and delegation cease to apply.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Lenders that:
SECTION 3.01. Organization; Qualification. Each of the Company and
its Subsidiaries is a limited liability company, corporation, partnership or
other entity duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, and is qualified to do business
and is in good standing in all jurisdictions in which the nature of the business
conducted by it makes such qualification necessary and where failure so to
qualify could reasonably be expected (either individually or in the aggregate)
to result in a Material Adverse Effect.
SECTION 3.02. Powers. Each of the Company and its Subsidiaries has
all requisite corporate or other power to own its assets and carry on its
business as now being or as
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43
proposed to be conducted; provided that no representation or warranty is made
under this Section 3.02 with respect to any Government Approvals.
SECTION 3.03. Authorization. The Company and each of its
Subsidiaries has full power, authority and legal right to execute and deliver
each of the Credit Documents and Principal Project Documents to which it is a
party and to perform its obligations thereunder. The execution, delivery and
performance by the Company and each of its Subsidiaries of each of the Credit
Documents and Principal Project Documents to which it is a party and the
consummation of the transactions contemplated thereby have been duly authorized
by all necessary corporate action on the part of the Company or such Subsidiary.
SECTION 3.04. No Conflicts. The execution, delivery and
performance by the Company and each of its Subsidiaries of the Credit Documents
and Principal Project Documents to which it is a party and the consummation of
the transactions contemplated thereby do not and will not (a) require any
consent or approval of the membership committee or board of directors (as the
case may be) or any shareholders or members of the Company or any of its
Subsidiaries or any other Person that has not been obtained and each such
consent and approval that has been obtained is adequate for its intended purpose
and is in full force and effect, (b) violate any material provision of any
Government Rule or any order, writ, judgment, decree, determination or award
having applicability to the Company or any of its Subsidiaries or the Iridium
Business, (c) violate any provision of the Company LLC Agreement (in the case of
the Company) or the certificate of incorporation or by-laws (or the applicable
constitutive documents) of any of the Company's Subsidiaries, (d) result in a
breach of or constitute a default under any Credit Document or Principal Project
Documents to which it is a party or any material indenture or loan or credit
agreement or any other material agreement or instrument to which the Company or
any of its Subsidiaries is a party or by which it or its properties and assets
is or are bound or affected or (e) result in or require the creation or
imposition of any Lien (other than Permitted Liens) upon or with respect to any
of their respective properties and assets now owned or hereafter acquired.
SECTION 3.05. Enforceability. Each of the Credit Documents (in
each case, from and after the date of execution and delivery thereof by the
parties thereto) and Principal Project Documents to which the Company or any of
its Subsidiaries is a party has been duly executed and delivered by the Company
or such Subsidiary and constitutes the legal, valid and binding obligation of
the Company or such Subsidiary enforceable against the Company or such
Subsidiary in accordance with its terms, except as the enforceability thereof
may be limited by (a) applicable bankruptcy, insolvency, reorganization,
fraudulent transfer, moratorium or other similar laws affecting the enforcement
of creditors' rights generally and (b) the application of general principles of
equity (regardless of whether such enforceability is considered in a proceeding
at law or in equity).
SECTION 3.06. Government Approvals.
(a) All Telecommunications Approvals required to be obtained by
the Company or any of its Subsidiaries for the Iridium Business have been duly
obtained, are validly issued, are in full force and effect, are held in the name
or extend to the benefit of the Company or one of its Subsidiaries and are free
from any conditions or requirements that the Company could not
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reasonably be expected to satisfy on or prior to the date such
Telecommunications Approval is required for the Iridium Business.
(b) To the best knowledge of the Company, all other
Telecommunications Approvals that have been obtained by any Person (other than
the Company or any of its Subsidiaries) for the Iridium Business have been duly
obtained, are validly issued, are in full force and effect, are held in the name
or extend to the benefit of such other Person and are free from any conditions
or requirements that the Company could not reasonably expect such other Person
to satisfy in the ordinary course of the Iridium Business.
(c) All Government Approvals (other than Telecommunications
Approvals) required to be obtained by the Company or any of its Subsidiaries for
the Iridium Business have been duly obtained, are validly issued, are in full
force and effect, are held in the name or extend to the benefit of the Company
or one of its Subsidiaries and are free from any conditions or requirements that
the Company could not reasonably be expected to satisfy on or prior to the date
such Government Approval is required for the Iridium Business.
(d) To the best knowledge of the Company, all other Government
Approvals (other than Telecommunications Approvals) that have been obtained by
any Person (other than the Company or any of its Subsidiaries) for the Iridium
Business have been duly obtained, are validly issued, are in full force and
effect, are held in the name or extend to the benefit of the relevant Person and
are free from any conditions or requirements that the Company could not
reasonably expect such other Person to satisfy in the ordinary course of the
Iridium Business.
(e) The Iridium Business, if operated in accordance with the
requirements of the Principal Project Documents, will in all material respects
conform to and comply with all applicable covenants, conditions, restrictions
and reservations in all Government Approvals required for the Iridium Business
and all Government Rules applicable thereto.
(f) Neither the Company nor any of its Subsidiaries is in
violation of any Government Rule applicable to any of the Credit Parties in
connection with the Iridium Business or any Government Approval required for the
Iridium Business and obtained by any of the Credit Parties, the violation of
which could reasonably be expected to result in a Material Adverse Effect. To
the best knowledge of the Company, no Person (other than the Credit Parties) is
in violation of any Government Rule applicable to it in connection with the
Iridium Business or any Government Approval required for the Iridium Business
and obtained by such Person, the violation of which could reasonably be expected
to result in a Material Adverse Effect.
SECTION 3.07. Financial Condition; No Material Adverse Change.
(a) The Company has heretofore furnished to the Lenders the
consolidated balance sheet and statements of income, stockholders' equity and
cash flows for the Company (i) as of and for the fiscal year ended December 31,
1997, reported on by KPMG Peat Marwick LLP, independent public accountants and
(ii) as of and for the fiscal quarter and the portion of the fiscal year ended
September 30, 1998, certified by the chief financial officer of the Company.
Such financial statements present fairly, in all material respects, the
consolidated financial position and results of operations and cash flows of the
Company and its Subsidiaries as of such
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dates and for such periods in accordance with GAAP, subject to normal year-end
audit adjustments and the absence of footnotes in the case of the statements
referred to in clause (ii) above.
(b) Since December 31, 1997, except as disclosed in the
Information Memorandum, there has been no change in the business, assets,
operations, prospects or condition, financial or otherwise, of the Company and
its Subsidiaries, taken as a whole, that (either individually or in the
aggregate) could reasonably be expected to result in a Material Adverse Effect.
SECTION 3.08. Properties.
(a) Each of the Company and its Subsidiaries owns and has, or when
acquired will own and have, good, legal and marketable title to its property
which it purports to own (other than its leasehold or licensed properties) free
and clear of all Liens other than Permitted Liens.
(b) Each of the Company and its Subsidiaries is, or when leases
creating leasehold properties are executed will be, lawfully possessed of a
valid and subsisting leasehold estate in and to its leasehold properties which
it purports to lease free and clear of all Liens other than Permitted Liens.
(c) Each of the Company and its Subsidiaries enjoys, and will
enjoy, peaceful and undisturbed possession of, or a license to use, all property
(subject only to Permitted Liens) that are necessary for the Iridium Business.
(d) Each of the Company and its Subsidiaries owns or possesses, or
is licensed to use (or believes it can acquire on reasonable terms), all
material Intellectual Property necessary for the Iridium Business or (to the
extent not required to be obtained on or prior to the date hereof) will be
obtained in due course when so necessary; licenses, contracts or other
agreements in respect of such Intellectual Property are (or when obtained, will
be) final and are (or will be) in full force and effect; and to the best
knowledge of the Company, the use thereof by the Company and its Subsidiaries
does not infringe upon, or conflict with, the rights of any other Person.
(e) Set forth on Schedule II is a list, as of the date hereof, of
all of the real property interests held, or (to the best knowledge of the
Company) planned to be held, by the Company and its Subsidiaries, indicating in
each case whether the respective property is (or is expected to be) owned or
leased, the identity of the owner or lessee, the location of the respective
property, the approximate value of such property and, in the case of property
not yet owned or leased, the estimated date of acquisition or leasing (if known
to the Company as of the date hereof).
SECTION 3.09. Proceedings. Except as described in Schedule III,
there is no action, suit or proceeding at law or in equity or by or before any
Government Authority, arbitral tribunal or other similar body now pending or, to
the best knowledge of the Company, threatened against the Company or any of its
Subsidiaries or any of their respective property (including,
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without limitation, the Iridium System), which could reasonably be expected to
result in a Material Adverse Effect.
SECTION 3.10. Compliance with Laws. Each of the Company and its
Subsidiaries is in compliance with all Government Rules applicable to it or its
property, except for any such non-compliance that could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 3.11. Environmental Matters. Except as described in
Schedule IV, neither the Company nor any of its Subsidiaries (a) has failed to
comply, in any material respect, with any Environmental Law or to obtain,
maintain or comply, in any material respect, with any permit, license or other
approval required under any Environmental Law or (b) has received notice of any
Environmental Claim that could reasonably be expected to result in liability to
the Company or any of its Subsidiaries in excess of $2,000,000.
Except as set forth in Schedule IV:
(i) there are no facts, circumstances, conditions or
occurrences regarding the Iridium Business that could reasonably
be expected (x) to form the basis of an Environmental Claim
arising with respect to or relating to any property of the Company
or any of its Subsidiaries associated with the Iridium Business,
(y) to cause the Iridium Business (or any property of the Company
or any of its Subsidiaries associated therewith) to be subject to
any restrictions on ownership, occupancy, use or transferability
under any Environmental Law or (z) to require the filing or
recording of any notice, registration, permit or disclosure
documents under any Environmental Law other than routine filings
or recordings;
(ii) there are no past, pending or, to the best knowledge
of the Company, threatened Environmental Claims arising with
respect to or relating to any property of the Company or any of
its Subsidiaries associated with the Iridium Business;
(iii) to the best knowledge of the Company, Hazardous
Materials have not at any time been used or Released at, on, under
or from any property of the Company or any of its Subsidiaries
associated with the Iridium Business in a manner that creates any
risk of any material liability under applicable Environmental Laws
or that otherwise could reasonably be expected to result in a
Material Adverse Effect; and
(iv) there have been no environmental investigations,
studies, audits, assessments, reviews or other analyses conducted
by or which are in the possession of the Company in relation to
any property of the Company or any of its Subsidiaries associated
with the Iridium Business which have not been provided to the
Administrative Agent.
SECTION 3.12. Investment and Holding Company Status. Neither the
Company nor any of its Subsidiaries is (a) an "investment company" or a company
"controlled" by a company registered as an "investment company", as such terms
are defined in the Investment Company Act of 1940 or (b) a "holding company", or
an "affiliate" of a company registered as a
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"holding company" or a "subsidiary company" of a company registered as a
"holding company", within the meaning of the Public Utility Holding Company Act
of 1935.
SECTION 3.13. Taxes. Each of the Company and its Subsidiaries has
filed or caused to be filed all tax returns that are required to be filed, and
has paid all Taxes shown to be due and payable on said returns or on any
assessments made against the Company or any of its Subsidiaries or any of their
respective property (other than Taxes the payment of which is not yet due or
which is being contested in good faith by appropriate proceedings and for which
such Person has set aside on its books adequate reserves), and no tax Liens
(other than Permitted Liens) have been filed and no claims are being asserted
with respect to any such Taxes. The charges, accruals and reserves on the books
of the Company and its Subsidiaries in respect of Taxes and other governmental
charges are, in the opinion of the Company, adequate.
SECTION 3.14. ERISA. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. As of the date hereof, the Company does not
have any Plans and is not obligated or required to contribute to any Plan or
Multiemployer Plan.
SECTION 3.15. Disclosure. The information, reports, financial
statements, exhibits and schedules (other than projections) furnished in writing
by or on behalf of the Company to any Agent or any Lender in connection with the
negotiation, preparation or delivery of this Agreement and the other Credit
Documents or included herein or therein or delivered pursuant hereto or thereto
(other than projections), when taken as a whole (together with the Information
Memorandum), do not contain any untrue statement of material fact or omit to
state any material fact necessary to make the statements herein or therein, in
light of the circumstances under which they were made (including the time of the
making of such statements), not misleading. The projections, estimates and/or
pro forma financial statements (including, without limitation, the Financial
Projections) furnished by or on behalf of the Company to the Agents or any
Lender in connection with the negotiation, execution and delivery of this
Agreement and the other Credit Documents or included herein or therein or
delivered pursuant hereto or thereto, have been prepared by the Company in good
faith on the basis of information and assumptions that the Company believed to
be reasonable as of the date of such information. All written information
furnished after the date hereof by the Company and its Subsidiaries to the
Agents and the Lenders in connection with this Agreement and the other Credit
Documents and the transactions contemplated hereby and thereby will not contain
any untrue statement of material fact or omit to state any material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, or (in the case of projections, estimates
and pro forma financial statements) will be prepared in good faith on the basis
of information and assumptions believed by the Company to be reasonable as of
the date of such information. There is no fact known to the Company that could
reasonably be expected to result in a Material Adverse Effect that has not been
disclosed herein, in the other Credit Documents, in the Information Memorandum
or in a report, financial statement, exhibit, schedule, disclosure letter or
other writing furnished to the Lenders for use in connection with the
transactions contemplated hereby or thereby. Notwithstanding anything in this
Section to the contrary, no
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representation is made in this Section with respect to Section 4 and Appendix D
of the Information Memorandum.
SECTION 3.16. Use of Credit. Neither the Company nor any of its
Subsidiaries is engaged principally, or as one of its important activities, in
the business of extending credit for the purpose, whether immediate, incidental
or ultimate, of buying or carrying Margin Stock, and no part of the proceeds of
any Loan hereunder will be used to buy or carry any Margin Stock and the
proceeds of the Loans hereunder shall be used in accordance with Section 6.09.
SECTION 3.17. Debt Agreements. Schedule V is a complete and
correct list of each credit agreement, loan agreement, indenture, purchase
agreement, guarantee, letter of credit or other arrangement providing for or
otherwise relating to any Indebtedness or any extension of credit (or commitment
for any extension of credit) to, or guarantee by, the Company or any of its
Subsidiaries outstanding on the date hereof, and the aggregate principal amount
outstanding or that may become outstanding under the then current terms of each
such arrangement is as of the date hereof correctly described in Schedule V.
SECTION 3.18. Liens. Schedule VI is a complete and correct list of
each Lien securing Indebtedness of the Company or any of its Subsidiaries
outstanding on the date hereof, and the aggregate Indebtedness secured (or that
may be secured) by each such Lien and the property covered by each such Lien is
as of the date hereof correctly described in Schedule VI.
SECTION 3.19. Capitalization. The Company has heretofore delivered
to the Lenders a true and complete copy of the Company LLC Agreement. The only
member of the Company on the date hereof is Iridium LLC. The membership and
other ownership interests in the Company are legally owned solely by Iridium
LLC, and all such interests have been validly issued and are fully paid-in and
non-assessable (except for the restriction contained in Section 6.07 of the
Delaware LLC Act). The Company does not have outstanding any securities
convertible into or exchangeable for any of its membership interests or other
ownership interests in or any rights to subscribe for or to purchase, or any
warrants or options for the purchase of, or any agreements providing for the
issuance (contingent or otherwise) of, or any calls, commitments or claims of
any character relating to, any such membership interests or other ownership
interests.
SECTION 3.20. Subsidiaries. Schedule VII is a complete and correct
list of all of the Subsidiaries of the Company as of the date hereof, together
with, for each such Subsidiary, (a) the jurisdiction of organization of such
Subsidiary, (b) each Person holding equity interests in such Subsidiary and (c)
the nature of the equity interests held by each such Person and the percentage
of ownership of such Subsidiary represented by such equity interests. Except as
disclosed in Schedule VII, (i) each of the Company and its Subsidiaries owns,
free and clear of Liens, and has the unencumbered right to vote, all outstanding
ownership interests in each Person shown to be held by it in Schedule VII, (ii)
all of such issued and outstanding equity interests are validly issued, fully
paid and nonassessable and (iii) there are no outstanding subscriptions,
options, warrants, commitments, preemptive rights or agreements of any kind
(including, without limitation, any shareholders' or voting trust agreements)
for the issuance, sale, registration or voting of, or securities convertible
into, any additional shares of equity interests of any type in, such Person.
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SECTION 3.21. Investments. Schedule VIII is a complete and correct
list of all Investments (other than Investments disclosed in Schedule VII and
Permitted Investments existing as of the date hereof) held by the Company or any
of its Subsidiaries in any Person on the date hereof and, for each such
Investment, (a) the identity of the Person or Persons holding such Investment
and (b) the nature of such Investment. Except as disclosed in Schedule VIII,
each of the Company and its Subsidiaries owns all such Investments as of the
date hereof, free and clear of all Liens other than Permitted Liens.
SECTION 3.22. Restrictive Agreements. None of the Subsidiaries of
the Company is, on the date hereof, subject to any indenture, agreement,
instrument or other arrangement of the type described in Section 7.09 (other
than as permitted thereunder).
SECTION 3.23. Business. Neither the Company nor any of its
Subsidiaries has conducted any business other than any business associated with
or related to the Iridium Business or any Related Business.
SECTION 3.24. Collateral; Security Interests. As of the Closing
Date and at all times thereafter, the provisions of the Security Documents to
which any Credit Party is a party are effective to create, in favor of the
Collateral Agent for the benefit of the Secured Parties, a legal, valid and
enforceable Lien on and security interest in all of the then existing Collateral
purported to be covered thereby. Except as set forth in the Security Documents,
as of the Closing Date and at all times thereafter, all necessary and
appropriate filings (including filings for the purpose of recording) have been
made in all necessary and appropriate public offices (in the case of such
Collateral consisting of satellites, in accordance with the Security Agreement)
and all other necessary and appropriate action has been taken, so that each such
Security Document creates a perfected Lien on and security interest in all
right, title, estate and interest of the Company or any of its Subsidiaries in
the then existing Collateral covered thereby, free and clear of all Liens (other
than Permitted Liens), and all necessary and appropriate consents to the
creation, perfection and enforcement of such Liens have been obtained from each
of the parties to the Principal Project Documents. No mortgage or financing
statement or other instrument or recordation covering all or any part of the
then existing Collateral purported to be covered by the Security Documents is on
file in any recording office, except such as may have been filed in favor of the
Collateral Agent for the benefit of the Secured Parties or in respect of any
Permitted Lien.
SECTION 3.25. Sufficiency of Project Documents.
(a) The Administrative Agent has received a certified copy of each
Principal Project Document in effect on the date hereof and each amendment,
modification or supplement thereto.
(b) Except as permitted pursuant to, or not prohibited by, Section
8.04 or 8.05, since the date hereof none of the Project Documents has been
amended, modified or supplemented or has been materially Impaired and all of the
Project Documents are in full force and effect (except to the extent any such
Project Document has expired or terminated in accordance with its terms).
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(c) All conditions precedent to the obligations of the respective
parties under the Project Documents have been satisfied or waived except for
such conditions precedent which are not yet required to be satisfied, and the
Company has no reason to believe that any such condition precedent cannot be
satisfied on or prior to the date when required.
(d) No Credit Party is in default in the performance of any
material covenant or obligation set forth in or otherwise in default in any
material respect under any Principal Project Document to which it is a party. No
Credit Party is in default in the performance of any covenant or obligation set
forth in or otherwise in default under any Other Project Document to which it is
a party, the effect of which could reasonably be expected to result in a
Material Adverse Effect.
(e) To the best knowledge of the Company, no Transaction Party
(other than any Credit Party) is in default in the performance of any material
covenant or obligation set forth in or otherwise in default in any material
respect under any Principal Project Document to which it is a party. To the best
knowledge of the Company, no such Transaction Party is in default in the
performance of any covenant or obligation set forth in or is otherwise in
default under any Other Project Document to which it is a party, the effect of
which could reasonably be expected to result in a Material Adverse Effect.
SECTION 3.26. Employee Matters. Except as set forth on Schedule X,
(a) on the date hereof, neither Company nor any of its Subsidiaries nor any of
their respective employees is subject to any collective bargaining agreement,
(b) on the date hereof, no petition for certification or union election is
pending with respect to the employees of the Company or any of its Subsidiaries
and no union or collective bargaining unit has sought such certification or
recognition with respect to the employees of any such Person and (c) there are
no strikes, slowdowns, work stoppages or controversies pending or, to the
knowledge of Company, threatened between the Company or any of its Subsidiaries
and their respective employees relating to the Iridium Business, other than any
thereof which could not reasonably be expected to result in a Material Adverse
Effect.
SECTION 3.27. Other Transaction Parties.
(a) To the best knowledge of the Company, (i) the execution,
delivery and performance by each Transaction arty (other than the Credit Parties
and Motorola) of each of the Transaction Documents to which it is a party and
the consummation of the transactions contemplated thereby have been duly
authorized by all necessary corporate or other action on the part of such other
Transaction Party, (ii) each such other Transaction Party has the full power,
authority and legal right to execute and deliver each of the Transaction
Documents to which it is a party and to perform its obligations thereunder,
(iii) the execution, delivery and performance by each such other Transaction
Party of each of the Transaction Documents to which it is a party and the
consummation of the transactions contemplated thereby have been duly authorized
by all necessary corporate or other action on the part of such other Transaction
Party, and (iv) each of the Project Documents to which any such other
Transaction Party is a party has been duly executed and delivered by such other
Transaction Party and constitutes the legal, valid and binding obligation of
such other Transaction Party enforceable against such other Transaction Party in
accordance with its terms, except as the enforceability thereof may be limited
by
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(a) applicable bankruptcy, insolvency, reorganization, fraudulent transfer,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally and (b) the application of general principles of equity (regardless of
whether such enforceability is considered in a proceeding at law or in equity),
unless the failure of the accuracy of any of the representations and warranties
contained in clauses (i) through (iv) above could not reasonably be expected to
result in a Material Adverse Effect.
(b) To the best knowledge of the Company, there is no action, suit
or proceeding at law or in equity or by or before any Government Authority,
arbitral tribunal or other body now pending or threatened against or affecting
any such other Transaction Party or any of its property which could reasonably
be expected to result in a Material Adverse Effect.
SECTION 3.28. Absence of Immunity. Neither the Company nor any of
its property or revenue is entitled to any right of immunity in any jurisdiction
from suit, court jurisdiction, judgment, attachment, set-off or execution of a
judgment or from any other legal process or remedy relating to the obligations
of the Company under this Agreement or any other Credit Document.
SECTION 3.29. Year 2000. All reprogramming or replacements
required to permit the proper functioning (but only to the extent that such
proper functioning would otherwise be impaired by the occurrence of the year
2000), in and following the year 2000, of the computer systems and other
equipment containing embedded microchips of the Company and its Subsidiaries,
and the testing of all such systems and equipment, as so reprogrammed, are
expected to be completed by the end of the third quarter of 1999, except to the
extent that the failure to complete such reprogramming, replacements and/or
testing by such time could not reasonably be expected to result in a Material
Adverse Effect. The cost to the Company and its Subsidiaries of such
reprogramming, replacements and/or testing and of the reasonably foreseeable
consequences of year 2000 to the Company and its Subsidiaries is not anticipated
to result in a Material Adverse Effect.
ARTICLE IV
CONDITIONS
SECTION 4.01. Conditions Precedent to the First Borrowing. The
obligations of each Lender to make its Loan on the Closing Date in accordance
with Section 2.01 is subject to the satisfaction of the following conditions
precedent:
(a) the conditions set forth in Appendix 1 (and receipt by the
Administrative Agent of each of the documents listed therein), each of
which shall be in form and substance satisfactory to the Administrative
Agent (or such condition shall have been waived in accordance with
Section 11.02); and
(b) the conditions precedent that:
(i) the representations and warranties of the Company set forth in
this Agreement and of the Company and each other Credit Party in each of
the other Credit Documents
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then in effect to which it is a party, and, to the best knowledge of the
Company, of each other Transaction Party in each of the Credit Documents
then in effect to which it is a party, shall be true and correct on and
as of the date of such Loans (or, if stated to have been made solely as
of an earlier date, were true and correct as of such earlier date); and
(ii) at the time of and immediately after giving effect to the
making of such Loans, no Default shall have occurred and be continuing.
SECTION 4.02. Conditions Precedent to the Second Borrowing. The
obligation of each Lender to make its Loan on the Second Borrowing Date is
subject to the satisfaction on such date of the following conditions precedent:
(a) the representations and warranties of the Company set forth in
this Agreement and of the Company and each other Credit Party in each of
the other Credit Documents to which it is a party, and, to the best
knowledge of the Company, of each other Transaction Party in each of the
Credit Documents to which it is a party, shall be true and correct on and
as of the date of such Borrowing (or, if stated to have been made solely
as of an earlier date, were true and correct as of such earlier date);
and
(b) at the time of and immediately after giving effect to such
Borrowing, no Default shall have occurred and be continuing.
ARTICLE V
INFORMATION
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full, the Company covenants and agrees with the Lenders that:
SECTION 5.01. Financial Statements and Other Information. The
Company will furnish to the Administrative Agent and each Lender:
(a) within 120 days after the end of each fiscal year of the
Company, the audited consolidated balance sheet and related statements of
operations, members' equity and cash flows of the Company and its
Subsidiaries as of the end of and for such year, setting forth in each
case in comparative form the figures for the previous fiscal year, all
reported on by KPMG Peat Marwick LLP or other independent public
accountants of recognized national standing (without a "going concern" or
like qualification or exception and without any qualification or
exception as to the scope of such audit) to the effect that such
consolidated financial statements present fairly in all material respects
the financial condition and results of operations of the Company and its
Subsidiaries on a consolidated basis in accordance with GAAP consistently
applied;
(b) within 60 days after the end of each of the first three fiscal
quarters of each fiscal year of the Company, the consolidated balance
sheet and related statements of operations, members' equity and cash
flows of the Company and its Subsidiaries as of the
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end of and for such fiscal quarter and the then elapsed portion of the
fiscal year, setting forth in each case in comparative form the figures
for (or, in the case of the balance sheet, as of the end of) the
corresponding period or periods of the previous fiscal year, all
certified by a Responsible Officer as presenting fairly in all material
respects the financial condition and results of operations of the Company
and its Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, subject to normal year-end audit adjustments and
the absence of footnotes;
(c) concurrently with any delivery of financial statements under
clause (a) or (b) of this Section, a certificate of a Responsible Officer
(i) certifying as to whether a Default has occurred and, if a Default has
occurred, specifying the details thereof and any action taken or proposed
to be taken with respect thereto, (ii) setting forth reasonably detailed
calculations demonstrating compliance with Sections 7.01, 7.06, 7.07,
7.10, 7.11 and 7.12, (iii) setting forth reasonably detailed calculations
of Excess Cash Flow for the most recently ended fiscal quarter, (iv)
specifying the jurisdictions, and respective percentages of revenues
associated with such jurisdictions under the Iridium business plan, in
reasonable detail to demonstrate compliance with Section 8.08 and (v)
stating whether any change in GAAP or in the application thereof has
occurred since the date of the most recent audited financial statements
delivered to the Administrative Agent pursuant hereto and, if any such
change has occurred, specifying the effect of such change on the
financial statements accompanying such certificate;
(d) concurrently with any delivery of financial statements under
clause (a) of this Section, a certificate of the accounting firm that
reported on such financial statements stating whether they obtained
knowledge during the course of their examination of such financial
statements of any Default (which certificate may be limited to the extent
required by accounting rules or guidelines);
(e) promptly upon receipt, copies of all formal accountants'
letters received by the Company's management in respect of the Company;
(f) within 10 days after the last day of August 1999 and within 30
days after the last day of each other month prior thereto, in each case
prior to the earlier to occur of the Guarantee Obligation Termination
Date and the Guarantee Obligation Release Date, a certificate of a
Responsible Officer setting forth in reasonable detail the calculation of
Cumulative Adjusted Accrued Revenues as at the last day of such month;
(g) promptly after the same become publicly available, copies of
all periodic and other reports, proxy statements and other materials
filed by the Company or any of its Subsidiaries, with the SEC, or with
any national securities exchange, or distributed by the Company to its
members generally;
(h) promptly upon receipt, copies of any notice of default
received by the Company or any of its Subsidiaries under any instrument
or agreement evidencing or providing for Indebtedness (other than this
Agreement) and any notice of acceleration of any such Indebtedness and,
if the Company or any Subsidiary gives any such notice of default, a copy
thereof simultaneously therewith; and
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(i) promptly following any request therefor, such other
information regarding the operations, business affairs and financial
condition of the Company or any of its Subsidiaries, the Iridium Business
(including, without limitation, information as to the Government
Approvals required therefor) or compliance with the terms of this
Agreement and the other Credit Documents, as the Administrative Agent or
any Lender (through the Administrative Agent) may reasonably request.
SECTION 5.02. Notices of Material Events. The Company will
furnish, or will cause to be furnished, to the Administrative Agent and each
Lender prompt written notice of the following:
(a) the Company or any Subsidiary becoming aware of the occurrence
of any Default or Trigger Event;
(b) the filing or commencement of any action, suit or proceeding
by or before any arbitrator or Government Authority against or affecting
the Company or any of its Subsidiaries that, if adversely determined,
could reasonably be expected to result in a Material Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or together with
any other ERISA Events that have occurred, could reasonably be expected
to result in liability of the Company and its Subsidiaries in an
aggregate amount exceeding $2,000,000;
(d) any material fire, explosion, accident, strike, lockout or
other labor dispute, drought, storm, hail, earthquake, embargo, act of
God or of the public enemy or other casualty (whether or not covered by
insurance) affecting the Iridium Business (unless notice thereof shall be
required to be furnished pursuant to Section 8.01(g)); and
(e) any other circumstance, act or condition (including, without
limitation, the adoption, amendment or repeal of any Government Rule
applicable to the Iridium Business or the Impairment of any Government
Approval or notice (whether formal or informal, written or oral) of the
failure to comply with the terms and conditions of any Government
Approval) which could reasonably be expected to result in a Material
Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of
a Responsible Officer setting forth the details of the event or development
requiring such notice and any action taken or proposed to be taken with respect
thereto.
SECTION 5.03. Notices under Principal Project Documents. The
Company will furnish to the Administrative Agent and each Lender promptly upon
their becoming available, copies of all material notices or material documents
received or delivered by the Company pursuant to any Principal Project Document
(including, without limitation, any notice or other document relating to a
failure by the Company to perform any of its covenants or obligations under such
Principal Project Document but excluding notices and other communications given
or received by the Company in the ordinary course of administration or
performance of such Principal Project Document).
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ARTICLE VI
AFFIRMATIVE COVENANTS
SECTION 6.01. Maintenance of Existence. The Company will, and will
cause each of its Subsidiaries to, preserve and maintain (a) its legal existence
and (b) all of its material licenses, rights, privileges and franchises required
for the Iridium Business and the due performance of all of its obligations and
the exercise of all of its rights under the Principal Project Documents to which
it is party, provided that nothing in this Section shall prohibit any
transaction expressly permitted under Section 7.03.
SECTION 6.02. Maintenance of Properties. The Company will, and
will cause each of its Subsidiaries to, keep and maintain all property material
to the conduct of its business, including without limitation the SNOC and any
backup facilities for business or satellite network operation, in good working
order and condition, ordinary wear and tear excepted.
SECTION 6.03. Taxes. The Company will, and will cause each of its
Subsidiaries to, (a) pay and discharge, or effectively provide for, all Taxes
imposed on the Company or on its income or profits or on any of its property
prior to the date on which penalties for the failure to pay or discharge such
Taxes attach thereto, provided that the Company shall have the right to contest
in good faith by appropriate proceedings the validity or amount of any such Tax,
and (b) promptly pay any valid, final judgment enforcing any such Tax and cause
the same to be satisfied of record.
SECTION 6.04. Compliance with Laws. The Company will, and will
cause each of its Subsidiaries to, comply in all material respects with all
Government Rules applicable to it or its property, except for any such
non-compliance that could not reasonably be expected to result in a Material
Adverse Effect.
SECTION 6.05. Government Approvals.
(a) The Company will, and will cause each of its Subsidiaries to,
comply in all material respects with all Government Approvals obtained by it and
required for the Iridium Business as shall now or hereafter be necessary under
applicable Government Rules.
(b) The Company will not, and will not permit any of its
Subsidiaries to, take any legal or administrative action that seeks to amend,
supplement or modify in any material adverse respect any Government Approval
obtained by the Company or any of its Subsidiaries and required for the Iridium
Business. To the extent the Company has the contractual or legal right to
prevent such action, the Company will not permit any other Person to take any
legal or administrative action that seeks to amend, supplement or modify any
Government Approval required for the Iridium Business if such action could
reasonably be expected to result in a Material Adverse Effect.
(c) If any Government Approval obtained by the Company or any of
its Subsidiaries and required for the Iridium Business is materially Impaired,
the Company will diligently and timely (i) make all filings, (ii) pursue all
remedies and appeals which the Company
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determines, in good faith, to be necessary or appropriate and (iii) take such
other lawful action, in each case, as shall be necessary or, in the good faith
opinion of the Company, desirable to (x) prevent such Impairment from becoming
final and non-appealable or otherwise irrevocable, (y) postpone the
effectiveness of such Impairment and (y) cause such Impairment to be revoked or
amended or modified so as to eliminate the reasonable possibility of such
Impairment. To the extent the Company has the contractual or legal right to do
so, if any Government Approval obtained by any Person (other than the Company or
any of its Subsidiaries) and required for the Iridium Business is materially
Impaired, the Company will diligently and timely, and will cause such Person
diligently and timely to, (i) make all filings, (ii) pursue all remedies and
appeals which the Company determines, in good faith, to be necessary or
appropriate and (iii) take such other lawful action, in each case, as shall be
necessary or, in the good faith opinion of the Company, desirable to (x) prevent
such Impairment from becoming final and non-appealable or otherwise irrevocable,
(y) postpone the effectiveness of such Impairment and (y) cause such Impairment
to be revoked or amended or modified so as to eliminate the reasonable
possibility of such Impairment, unless in each case such Impairment could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 6.06. Environmental Compliance.
(a) The Company shall not Use or Release, or permit the Use or
Release of, Hazardous Materials on any property of the Company or any of its
Subsidiaries other than in accordance with the requirements of all applicable
Environmental Laws.
(b) To the extent required by Environmental Laws, the Company
shall conduct and complete any investigation, assessment, study, sampling and
testing and undertake any cleanup, removal, remedial or other action necessary
to remove and clean up all Hazardous Materials Released at, on, in, under or
from any property of the Company or any of its Subsidiaries associated with the
Iridium Business, in accordance with the requirements of all applicable
Environmental Laws.
(c) The Company shall deliver to the Administrative Agent promptly
upon obtaining knowledge of any fact, circumstance, condition or occurrence that
could reasonably be expected to form the basis of an Environmental Claim in
excess of $2,000,000 arising with respect to or relating to any property of the
Company or any of its Subsidiaries associated with the Iridium Business, a
notice thereof describing the same in reasonable detail and, together with such
notice or as soon thereafter as possible, a description of the action that the
Company has taken or proposes to take with respect thereto and, thereafter, from
time to time such detailed reports with respect thereto as the Administrative
Agent may reasonably request.
SECTION 6.07. Books and Records. The Company will, and will cause
each of its Subsidiaries to, keep proper books of record and account in
accordance with GAAP in which full, true and correct entries are made of all
dealings and transactions in relation to its business and activities.
SECTION 6.08. Inspection Rights. Subject to the confidentiality
requirements set forth in Section 11.12, the Company will, and will cause each
of its Subsidiaries to, permit representatives of the Global Lead Arrangers, the
Agents or any Lender (including, without
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limitation, any advisor, at the reasonable request of the Global Lead
Arrangers), upon reasonable prior notice to the Company unless a Default shall
have occurred and is continuing, to visit and inspect its property, to examine,
copy or make excerpts from its books, records and documents and to discuss its
affairs, finances and accounts with its principal officers, engineers and
independent accountants, all at such reasonable times during normal business
hours and at such intervals as such representatives may reasonably request. The
Company hereby authorizes each of its principal officers, engineers and
independent accountants to discuss the Company's affairs, finances and accounts
as contemplated by this Section.
SECTION 6.09. Use of Proceeds. The proceeds of the Loans on the
occasion of each Borrowing will be used solely to (a) repay outstanding amounts
under the Credit Agreement dated as of August 21, 1996, as amended, between the
Company (as assignee of Iridium LLC), the lenders party thereto, Barclays
Capital as documentation agent thereunder and Chase as administrative agent
thereunder (the "Existing Guaranteed Credit Agreement") and the Credit Agreement
dated as of December 19, 1997, as amended, between the Company, the lenders
party thereto, Barclays Capital as documentation agent thereunder and Chase as
administrative agent thereunder (the "Existing Secured Credit Agreement"), (b)
pay the fees and expenses reasonably incurred by the Company under, or in
connection with, such refinancing, (c) pay or reimburse Costs, and (d) pay the
fees and expenses reasonably incurred by the Company under, or in connection
with the execution and delivery of, the Credit Documents. No part of the
proceeds of any Loan will be used, whether directly or indirectly, for any
purpose that entails a violation of any of the Regulations of the Board,
including Regulations U and X. Notwithstanding anything to the contrary
contained in this Section, neither any of the Agents nor any of the Lenders
shall have any responsibility as to the use of any proceeds of the Loans by the
Company.
SECTION 6.10. Collateral; Security Interests.
(a) Except as may be provided in the Security Documents and
subject to any Disposition permitted under Section 7.04, the Company will, and
will cause each of its Subsidiaries to, at all times after the Closing Date: (i)
take, or cause to be taken, all action required (x) to maintain good, legal and
marketable title to the Collateral purported to be pledged by it pursuant to the
Security Documents to which it is party (other than any leasehold properties
covered thereby) free and clear of all Liens other than Permitted Liens and (y)
to remain lawfully possessed of a valid and subsisting leasehold estate in and
to any leasehold properties purported to be pledged by it pursuant to such
Security Documents free and clear of all Liens other than Permitted Liens; (ii)
at all times, maintain and preserve the Liens created on the Collateral
purported to be pledged by it pursuant to such Security Documents and the first
priority thereof (subject to Permitted Liens); and (iii) cause all such Security
Documents to be in full force and effect.
(b) Except as may be provided in the Security Documents and
subject to any Disposition permitted under Section 7.04, the Company will, and
will cause each Subsidiary Guarantor to, execute any and all further documents,
financing statements, agreements and instruments, and take all such further
actions (including the filing and recording of financing statements, fixture
filings, mortgages, deeds of trust and other documents), which may be required
under any applicable law, or which any Agent or the Required Lenders may
reasonably
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request, to effectuate the transactions contemplated by the Credit Documents
then in effect or (after the Closing Date) to grant, preserve, protect or
perfect the Liens created or intended to be created by the Security Documents to
which any Credit Party is a party or the validity or priority of any such Lien,
all at the expense of the Company. Without limiting the foregoing, the Company
shall promptly discharge, at its own cost and expense, any Lien (other than
Permitted Liens) on the Collateral purported to be pledged by it pursuant to
such a Security Document.
(c) If any assets (including any real property or improvements
thereto or any interest therein, including any leasehold interests, but only if
such asset has a value in excess of $10,000,000 and is located in the United
States of America or any territory thereof), are acquired by the Company or any
Domestic Subsidiary after the Closing Date (other than assets constituting
Collateral under the Security Agreement), the Company will notify the
Administrative Agent thereof (unless such assets were acquired by the Company or
its Subsidiary in the ordinary course of its business), and the Company will
cause such assets (in the case of any real property including leasehold
interests, upon the request of the Required Lenders through the Administrative
Agent) to be subjected to a Lien under the relevant Security Documents, and will
take, and cause its Domestic Subsidiaries to take, such actions as shall be
necessary or reasonably requested by the Administrative Agent to grant and
perfect such Liens, including actions described in paragraph (b) of this
Section, all at the expense of the Company; provided that, notwithstanding the
foregoing, the Company will cause a mortgage to be executed and delivered with
respect to (i) the SNOC and (ii) any ownership or leasehold interest in the
Hawaiian TTAC located in Oahu, Hawaii, in each case within 30 days after the
acquisition thereof by the Company from Motorola (together with the other
documents required by the immediately succeeding sentence). If the Required
Lenders shall have reasonably requested a mortgage, deed of trust or similar
instrument to be delivered in respect of any such real property, fixtures and/or
leasehold interests in respect of real property, the Company shall deliver, or
cause to be delivered, the following documents and/or satisfy the following
conditions (in each case to the reasonable satisfaction of the Administrative
Agent):
(i) The following documents each of which shall be duly executed
(and, where appropriate, acknowledged) by the party or parties thereto
and delivered to the Administrative Agent:
(A) one or more Mortgages covering the subject real
property, fixtures and/or leasehold interests (the "Mortgaged
Properties"), in recordable form (in such number of copies as the
Administrative Agent shall have requested);
(B) with respect to the Mortgaged Properties, one or more
mortgagee policies of title insurance on A.L.T.A. forms reasonably
satisfactory to the Administrative Agent and issued by one or more
title companies satisfactory to the Administrative Agent (the
"Title Companies"), insuring the validity and priority of the
Liens created under each such Mortgage for and in amounts
reasonably satisfactory to the Administrative Agent, subject only
to such exceptions as are reasonably satisfactory to the
Administrative Agent, and, to the extent necessary under
applicable law, for filing in the appropriate county land
office(s), Uniform Commercial Code financing statements covering
fixtures
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relating to the Mortgaged Properties, in each case appropriately
completed and duly executed;
(C) with respect to the Mortgaged Properties, as-built
surveys of recent date of each facility to be covered by each such
Mortgage, showing such matters as may be reasonably required by
the Administrative Agent, which surveys shall be in form and
content reasonably acceptable to the Administrative Agent, and
certified to the Administrative Agent, the Lenders and the Title
Companies, and shall have been prepared by a registered surveyor
reasonably acceptable to the Administrative Agent;
(D) if reasonably requested by the Administrative Agent,
certified copies of certificates of occupancy (or, if it is not
the practice to issue certificates of occupancy in the
jurisdiction in which the facilities to be covered by such
Mortgage are located, then such other evidence reasonably
satisfactory to the Administrative Agent) permitting the fully
functioning operation and occupancy of each such facility, zoning
correspondence and such other permits necessary for the use and
operation of each such facility issued by the respective
governmental authorities having jurisdiction over each such
facility;
(E) Uniform Commercial Code searches in each of the
jurisdictions (both state and county levels) where the Mortgaged
Properties are located;
(F) if reasonably requested by the Administrative Agent,
appraisals as of recent date of each of the Mortgaged Properties
(including the facilities and other improvements located thereon
and machinery and equipment), such appraisals to be prepared by an
appraiser, and to use a methodology, acceptable to the
Administrative Agent, or other evidence of the value of such
Mortgaged Properties reasonably satisfactory to the Administrative
Agent;
(G) if reasonably requested by the Administrative Agent, an
environmental survey and assessment of recent date prepared by a
firm of licensed engineers (familiar with the identification of
toxic and hazardous substances) in form and substance satisfactory
to the Administrative Agent, such environmental survey and
assessment to be based upon physical on-site inspections by such
firm of the sites comprising the Mortgaged Properties and the
related facilities, whether owned, operated or leased by the
Company and its Subsidiaries, as well as a historical review of
the uses of such sites and facilities and of the business and
operations of the Company and to provide that the Lenders may rely
on the results of such audits;
(H) in the case of any leasehold interests covered by the
Mortgages, such estoppels, consents, subordination agreements and
other agreements from the lessor, the holder of a fee mortgage or
a sublessee, as the Administrative Agent may reasonably request;
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(I) evidence reasonably satisfactory to the Administrative
Agent of the existence of insurance with respect to such Mortgaged
Properties that complies with the requirements of Section 8.01,
and that such insurance is in full force and effect and that all
premiums then due and payable thereon have been paid;
(J) opinions, each dated on or about the date the
conditions set forth in this Section are satisfied, of local
counsel in the respective jurisdictions in which such Mortgaged
Properties are located, in form and substance reasonably
satisfactory to the Administrative Agent (and the Company hereby
instructs such counsel to deliver such opinion(s) to the Lenders
and the Agents); and
(K) such other documents and evidence relating to the
foregoing conditions as the Administrative Agent or the Required
Lenders (through the Administrative Agent) may reasonably request.
(ii) The Company shall have paid to the Title Companies all
expenses and premiums of the Title Companies in connection with the
issuance of such policies and in addition shall have paid to the Title
Companies an amount equal to the recording and stamp taxes payable in
connection with recording each Mortgage and the Uniform Commercial Code
financing statements in the appropriate county land office or state
recording office, as the case may be.
(iii) The Company shall have paid or reimbursed Administrative
Agent for all reasonable out-of-pocket costs and expenses not theretofore
paid or reimbursed in connection with the foregoing, including, without
limitation, the reasonable fees and expenses of counsel, in connection
with the negotiation, preparation, execution and delivery of the
documents contemplated by this Section.
SECTION 6.11. Certain Obligations Respecting Subsidiaries.
(a) The Company will, and will cause each of its Subsidiaries to,
take such action from time to time as shall be necessary to ensure that each
Subsidiary of the Company is, directly or indirectly, a Wholly Owned Subsidiary
(subject to Section 7.03).
(b) After the Closing Date, the Company will take such action, and
will cause each of its Subsidiaries to take such action, from time to time as
shall be necessary to ensure that (i) 100% of the outstanding equity interests
of each Domestic Subsidiary owned by the Company or any other Domestic
Subsidiary and (ii) 65% of the outstanding equity interests of each Foreign
Subsidiary owned by the Company or any Domestic Subsidiary is pledged to the
Collateral Agent pursuant to the Security Agreement. Subject to and in
furtherance of the foregoing, in the event that any additional shares of capital
stock or other certificated equity interests shall be issued by any such
Subsidiary after the Closing Date, the Company agrees forthwith to deliver to
the Collateral Agent pursuant to the Security Agreement the certificates
evidencing such shares of stock or equity interests, as the case may be,
accompanied by undated stock (or transfer, as the case may be) powers executed
in blank and to take such other action as the Collateral Agent shall request to
perfect the security interest created therein pursuant to the Security
Agreement.
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(c) After the Closing Date, the Company will take such action, and
will cause each of its Domestic Subsidiaries to take such action, from time to
time as shall be necessary to ensure that all Domestic Subsidiaries of the
Company which are directly owned by the Company or another Domestic Subsidiary
are "Subsidiary Guarantors" under the Subsidiary Guarantee Agreement, and have
assigned to the Collateral Agent for the benefit of the Secured Parties all of
its right, title and interest in any Collateral held by such Domestic Subsidiary
to the extent required herein or in any Security Document to which it is a
party. Without limiting the generality of the foregoing, in the event that the
Company or any of its Domestic Subsidiaries shall form or acquire any new
Domestic Subsidiary after the Closing Date that shall constitute a Subsidiary
hereunder, the Company or such Domestic Subsidiary, as the case may be, will
cause such new Subsidiary to after the Closing Date:
(i) become a "Subsidiary Guarantor" under the Subsidiary Guarantee
Agreement, and an "Obligor" under the Security Agreement pursuant to a
Subsidiary Guarantee Assumption Agreement;
(ii) cause such Subsidiary to take such action (including, without
limitation, delivering such certificated equity interests and executing
and delivering such Uniform Commercial Code financing statements, if
applicable) as shall be necessary to create and perfect valid and
enforceable first priority Liens on substantially all of the personal
property of such new Subsidiary, to the extent required herein or in any
Security Document to which it is a party; and
(iii) deliver such proof of corporate or other action, incumbency
of officers, opinions of counsel and other documents as is consistent
with those delivered by the Subsidiaries of the Company pursuant to
Article IV or as reasonably requested by the Administrative Agent.
SECTION 6.12. License Subsidiaries; Real Estate Subsidiaries.
(a) The Company will take such action, and will cause each of its
Subsidiaries to take such action, as shall be necessary so that, from and after
the transfer of the FCC License by Motorola pursuant to Section 18.H of the
Space System Contract, the FCC License and the other Telecommunications
Approvals (if any) identified on Schedule II or III from time to time issued to
the Company or any of its Subsidiaries will be held by a separate License
Subsidiary. Anything in this Agreement to the contrary notwithstanding, the
Company will not permit any License Subsidiary to: (i) sell, assign or otherwise
dispose of the FCC License or any other Telecommunications Approval held by it;
(ii) create, assume, incur or suffer to exist any Lien on any of its properties;
(iii) create, assume, incur or suffer to exist any Indebtedness (other than the
Guarantees provided by a License Subsidiary in connection with this Agreement,
the Existing Senior Notes or any additional Indebtedness permitted under Section
7.01(f)); or (iv) engage in any business or other transaction other than holding
the Telecommunications Approval(s) held by it and activities reasonably
incidental thereto, and the incurrence of Indebtedness permitted under clause
(iii) above.
(b) The Company will take such action, and will cause each of its
Subsidiaries to take such action, as shall be necessary so that all real
property (including leasehold interests) and
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fixtures thereon of the Company and its Subsidiaries will be held by one or more
Real Estate Subsidiaries; provided that (i) all such real property located in
the United States of America shall be held by a Domestic Subsidiary and (ii) all
such real property located outside of the United States of America may be held
by a Foreign Subsidiary. Anything in this Agreement to the contrary
notwithstanding, the Company will not permit any Real Estate Subsidiary to: (i)
sell, assign or otherwise dispose of real property and fixtures thereon held by
it (other than by Permitted Liens or as permitted by Section 7.04); (ii) create,
assume, incur or suffer to exist any Lien (other than Permitted Liens) on any of
its properties; (iii) create, assume, incur or suffer to exist any Indebtedness
(other than (A) Capital Lease Obligations of such Real Estate Subsidiary or (B)
the Guarantees provided by such Real Estate Subsidiary in connection with this
Agreement, the Existing Senior Notes or any additional unsecured Indebtedness
permitted under Section 7.01(f)); or (iv) engage in any business or other
transaction other than holding the real property and fixtures thereon held by it
and activities reasonably incidental thereto, and the incurrence of Indebtedness
permitted under clause (iii) above.
ARTICLE VII
NEGATIVE COVENANTS
Until the Commitments have expired or terminated and the principal
of and interest on each Loan and all fees payable hereunder have been paid in
full, the Company covenants and agrees with the Lenders that:
SECTION 7.01. Indebtedness. The Company will not, and will not
permit any of its Subsidiaries to, create, incur, assume or permit to exist any
Indebtedness, except:
(a) Indebtedness of the Company and its Subsidiaries hereunder and
the other Credit Documents;
(b) unsecured Indebtedness under the Motorola Guaranteed Credit
Agreement not exceeding $750,000,000 in aggregate principal amount
outstanding at any one time (as such amount may be increased pursuant to
clauses (c) or (d) below), provided that the proceeds thereof are used
solely in accordance with Section 8.12 of the Motorola Guaranteed Credit
Agreement;
(c) additional unsecured Indebtedness of the Company guaranteed by
Motorola, pursuant to the Motorola Guarantee Obligation not exceeding
$350,000,000 in aggregate principal amount outstanding at any one time,
which may be incurred under the Motorola Guaranteed Credit Agreement or
another credit agreement, and any Guarantee thereof by any Subsidiary,
provided that (i) the proceeds thereof are used, or are committed to be
used (and are actually so used within 180 days of such incurrence), to
pay or reimburse Costs or to Refinance Indebtedness outstanding pursuant
to this clause (c) and (ii) if not incurred under the Motorola Guaranteed
Credit Agreement, such Indebtedness shall have a maturity no earlier than
(and shall not contain any amortization or prepayment requirements prior
to) the Maturity Date and otherwise contain terms and conditions
(including, without limitation, covenants and events of default, but
excluding terms as to
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pricing and any terms applicable solely after the Maturity Date) not more
restrictive than the terms of the Motorola Guaranteed Credit Agreement;
(d) additional unsecured Indebtedness of the Company guaranteed by
Motorola not exceeding $400,000,000 in aggregate principal amount
outstanding at any one time, which may be incurred under the Motorola
Guaranteed Credit Agreement or another credit agreement, and any
Guarantee thereof by any Subsidiary, provided that (i) the proceeds
thereof are used to Refinance the Deferred O&M Amounts or to Refinance
Indebtedness outstanding pursuant to this clause (d) and (ii) if not
incurred under the Motorola Guaranteed Credit Agreement, such
Indebtedness shall have a maturity no earlier than (and shall not contain
any amortization or prepayment requirements prior to) the Maturity Date
and otherwise contain terms and conditions (including, without
limitation, covenants and events of default, but excluding terms as to
pricing and any terms applicable solely after the Maturity Date) not more
restrictive than the terms of the Motorola Guaranteed Credit Agreement;
(e) the Existing Senior Notes in aggregate principal amount of
$1,450,000,000 outstanding on the date hereof;
(f) additional unsecured Indebtedness of the Company (including,
without limitation, Indebtedness that is exchangeable for or exercisable
or convertible into equity interests in IWCL, the Company or any of its
Affiliates, or Indebtedness that is subordinated to the payment of any
other Indebtedness of the Company) and in respect of which any of the
Company's Subsidiaries may be a co-obligor or guarantor thereof, which
shall (i) (A) have a maturity date no earlier than the maturity of the
Existing Senior Notes, (B) not provide for any amortization or redemption
at any time prior to the date occurring one year after the Maturity Date
(other than on terms comparable to the Existing Senior Notes), and (C)
contain other terms and conditions (including, without limitation,
covenants and events of default, but excluding terms as to pricing) not
more restrictive than the terms of the Existing Senior Notes or (ii)
otherwise be approved by the Required Lenders; provided that the Net
Available Proceeds thereof are used to prepay the Loans to the extent
required by Sections 2.09(b), (c) and (j);
(g) the Existing Senior Subordinated Notes;
(h) (i) any Motorola Obligations and (ii) any other obligations of
the Company in respect of the Principal Project Documents (to the extent
any such obligations shall constitute Indebtedness);
(i) Indebtedness in respect of Capital Lease Obligations not
exceeding $20,000,000 in aggregate principal amount outstanding at any
one time;
(j) Indebtedness of any Person existing at the time such Person
merges into or consolidates with or becomes a Subsidiary of the Company
and Indebtedness secured by a Lien encumbering any property acquired by
such Person, which Indebtedness was not incurred in anticipation of, and
was outstanding prior to, such merger,
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consolidation or acquisition, provided that the Required Lenders shall
have consented to such merger, consolidation or acquisition to the extent
required under Sections 7.03 and 7.05, respectively;
(k) additional unsecured Indebtedness of the Company guaranteed by
Motorola not exceeding $175,000,000 in aggregate principal amount
outstanding at any one time and/or additional unsecured Indebtedness of
the Company guaranteed by Kyocera not exceeding $122,500,000 in aggregate
principal amount outstanding at any one time, provided that (i) the
proceeds thereof are used to pay Motorola or Kyocera, as the case may be,
for handsets or pagers manufactured by such entity in connection with the
Iridium Business and (ii) such Indebtedness shall have a maturity date no
earlier than (and shall not contain any amortization or prepayment
requirements prior to) the Maturity Date and otherwise shall contain
terms and conditions (including, without limitation, covenants and events
of default, but excluding terms as to pricing and any terms applicable
solely after the Maturity Date) not more restrictive than the Motorola
Guaranteed Credit Agreement (in the case of Indebtedness guaranteed by
Motorola) or this Agreement (in the case of Indebtedness guaranteed by
Kyocera); and
(l) additional Indebtedness not exceeding $5,000,000 in aggregate
principal amount outstanding at any one time.
SECTION 7.02. Liens. The Company will not, and will not permit any
of its Subsidiaries to, create, incur, assume or permit to exist any Lien on any
property or asset now owned or hereafter acquired by it, or assign or sell any
income or revenues (including accounts receivable) or rights in respect of any
thereof, except for Permitted Liens.
SECTION 7.03. Mergers, Consolidations, Etc. The Company will not,
and will not permit any of its Subsidiaries to, enter into any transaction of
merger, consolidation or amalgamation, or liquidate, wind up or dissolve itself
(or suffer any liquidation of dissolution), or convey, transfer or lease its
property substantially as an entirety to any person, except that (a) any
Subsidiary (other than a License Subsidiary or a Real Estate Subsidiary) may
enter into any such transaction with the Company, so long as the Company is the
surviving entity and (b) any Subsidiary (other than a License Subsidiary or a
Real Estate Subsidiary) may enter into any such transaction with any other
Subsidiary (other than a License Subsidiary or a Real Estate Subsidiary),
provided that no Domestic Subsidiary may merge with or into any Foreign
Subsidiary unless the Domestic Subsidiary is the surviving entity of such
merger.
SECTION 7.04. Sale of Assets. The Company will not, and will not
permit any of its Subsidiaries to, Dispose of any assets, except:
(a) sales of communications and related services and equipment in
the ordinary course of business;
(b) sales of obsolete assets or assets no longer used or useful in
the ordinary course of the business of the Company and its Subsidiaries;
and
(c) sales of Investments in accordance with the Depositary
Agreement.
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SECTION 7.05. Purchase of Assets. The Company will not, and will
not permit any of its Subsidiaries to, purchase any assets, except:
(a) the purchase of assets in connection with the Iridium Business
in accordance with the Project Documents or otherwise in the ordinary
course of business;
(b) the purchase of assets in connection with the Restoration of
Affected Property; and
(c) Investments permitted under Section 7.06.
SECTION 7.06. Investments. The Company will not, and will not
permit any of its Subsidiaries to, make or permit to remain outstanding any
Investments, except:
(a) Investments outstanding on the date hereof and identified in
Schedule VIII;
(b) deposit and other accounts permitted to be maintained by the
Company pursuant to Section 8.02;
(c) Permitted Investments;
(d) Hedging Agreements entered into by the Company in the ordinary
course of business and not for speculative purposes; and
(e) other Investments in an aggregate outstanding amount not at
any time exceeding $5,000,000 (measured by the amount of each such
Investment as of the time such Investment is made), provided that such
Investments are made only in Related Businesses.
SECTION 7.07. Restricted Payments. The Company will not make, or
agree to pay or make, directly or indirectly, any Restricted Payment, except:
(a) so long as no Default shall have occurred and be continuing,
distributions to Iridium LLC to enable Iridium LLC to make distributions
to the Iridium LLC Members pursuant to Section 3.07(c) of the Iridium LLC
Agreement with respect to each such Member's U.S. income tax liability
(if any); and
(b) any distribution to Iridium LLC to enable Iridium LLC to
redeem fractional interests of its equity interests following the
exercise of any warrants, options or other rights to acquire any equity
interests in Iridium LLC by the holders thereof.
Nothing herein shall be deemed to prohibit the payment of
dividends by any Subsidiary of the Company to the Company or to any other
Subsidiary of the Company.
SECTION 7.08. Transactions with Affiliates. Except as expressly
permitted by this Agreement, the Company will not, and will not permit any of
its Subsidiaries to, directly or indirectly: (a) make any Investment in an
Affiliate; (b) transfer, sell, lease, assign or otherwise dispose of any
property to an Affiliate; or (c) merge into or consolidate with or purchase or
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acquire property from an Affiliate, provided that the Company and its
Subsidiaries may enter into any such transaction not otherwise prohibited by the
terms of this Agreement (i) provided for and pursuant to any agreements that the
Company is or will be a party to in connection with the Iridium Business, (ii)
if the monetary or business consideration arising therefrom would, in the
opinion of the Company, be substantially as advantageous to the Company and its
Subsidiaries as the monetary or business consideration that would be obtained in
a comparable transaction with a Person not an Affiliate or (iii) provided that
the aggregate amount of all such transactions (other than any such permitted
under clauses (i) and (ii) above) does not exceed $10,000,000 in the aggregate.
SECTION 7.09. Restrictive Agreements. The Company will not, and
will not permit any of its Subsidiaries to, directly or indirectly, enter into,
incur or permit to exist any agreement or other arrangement that prohibits,
restricts or imposes any condition upon (a) the ability of the Company or any
Subsidiary to create, incur or permit to exist any Lien upon any of its property
or assets or to sell, transfer or otherwise dispose of its assets, (b) the
ability of any Subsidiary to (i) pay dividends or other distributions with
respect to any shares of its equity interests, (ii) make or repay loans or
advances to the Company or any other Subsidiary or (iii) Guarantee Indebtedness
of the Company or any other Subsidiary under any of the Credit Documents or (c)
the ability of the Company or any Subsidiary to enter into amendments,
modifications, supplements or waivers of any of the Credit Documents or
Principal Project Documents; provided that (i) the foregoing shall not apply to
restrictions and conditions imposed by any applicable Government Rule or by any
Credit Document, (ii) the foregoing shall not apply to (A) restrictions and
conditions existing on the date hereof in the Motorola Guaranteed Credit
Agreement, the Senior Note Indentures, the MOU Agreements or otherwise
identified on Schedule IX (but shall apply to any amendment or modification
thereof expanding the scope of any such restriction or condition) or (B) any
comparable restrictions and conditions (not more restrictive in any material
respect than those referred to in clause (A) above) contained in any agreement
or instrument relating to Indebtedness permitted under Section 7.01, (iii) the
foregoing shall not apply to customary restrictions and conditions contained in
agreements relating to the sale of a Subsidiary pending such sale, provided that
such restrictions and conditions apply only to the Subsidiary that is to be sold
and such sale is permitted hereunder and (iv) clause (a) of the foregoing shall
not apply to either restrictions or conditions imposed by any agreement relating
to secured Indebtedness permitted by this Agreement if such restrictions or
conditions apply only to the property or assets securing such Indebtedness or
customary provisions in leases restricting the assignment thereof.
SECTION 7.10. Financial Covenants.
(a) At all times prior to the Covenant Conversion Date:
(i) Minimum Subscribers. The Company will not permit Total
Satellite Subscribers or Total Subscribers as at any date specified below
to be less than the respective number set opposite such date below:
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<TABLE>
<CAPTION>
Total Satellite
---------------
Date Subscribers Total Subscribers
---- ----------- -----------------
<S> <C> <C>
March 31, 1999 27,000 52,000
June 30, 1999 88,000 213,000
September 30, 1999 173,000 454,000
</TABLE>
(ii) Minimum Revenues. The Company will not permit (x) Cumulative
Cash Revenues or (y) Cumulative Accrued Revenues, in each case for the
period ending on the tenth Business Day after any date specified below,
to be less than the respective amount set opposite such date below:
<TABLE>
<CAPTION>
Cumulative
Date Cumulative Cash Revenues ($) Accrued Revenues ($)
---- ---------------------------- --------------------
<S> <C> <C>
March 31, 1999 $4,000,000 $30,000,000
June 30, 1999 50,000,000 150,000,000
September 30, 1999 220,000,000 470,000,000
</TABLE>
(iii) Total Invested Capital. The Company will not at any time
permit the ratio of (a) the aggregate outstanding amount of Total
Indebtedness (after giving effect to any Indebtedness incurred on any
date and the application of proceeds therefrom) to (b) Total Invested
Capital to exceed 0.6667 to 1.
(b) At all times from and after the Covenant Conversion Date:
(i) Secured Leverage Ratio. The Company will not permit the
ratio of (a) the aggregate outstanding amount of Secured Indebtedness
(after giving effect to any Indebtedness incurred on any date and the
application of proceeds therefrom) to (b) Annualized Adjusted EBITDA at
any time during any period set forth below to exceed the ratio set forth
opposite such period below:
<TABLE>
<CAPTION>
Period Ratio
------ -----
<S> <C>
From and including December 31, 1999
to but excluding March 31, 2000 2.0:1
Thereafter 1.5:1
</TABLE>
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68
(ii) Total Leverage Ratio. The Company will not permit the ratio
of (a) the aggregate outstanding amount of Total Indebtedness (after
giving effect to any Indebtedness incurred on any date and the
application of proceeds therefrom) to (b) Annualized Adjusted EBITDA at
any time during any period set forth below to exceed the ratio set forth
opposite such period below:
<TABLE>
<CAPTION>
Period Ratio
------ -----
<S> <C>
From and including December 31, 1999
to but excluding March 31, 2000 10:1
From and including March 31, 2000
to but excluding June 30, 2000 7.5:1
Thereafter 5.0:1
</TABLE>
(iii) Interest Coverage Ratio. The Company will not permit the
Interest Coverage Ratio at any time during any period set forth below to
be less than the ratio set forth opposite such period below:
<TABLE>
<CAPTION>
Period Ratio
------ -----
<S> <C>
From and including December 31, 1999
to but excluding March 31, 2000 1.0:1
From and including March 31, 2000
to but excluding June 30, 2000 1.5:1
Thereafter 2.0:1
</TABLE>
SECTION 7.11. Capital Expenditures. The Company will not, and will
not permit any of its Subsidiaries, to make Capital Expenditures during the
period from January 1, 2000 to the Maturity Date in excess of the sum of (a)
$350,000,000 plus (b) the difference between (i) $300,000,000 and (ii) the
aggregate amount of Capital Expenditures made during the period from January 1,
1999 through December 31, 1999.
SECTION 7.12. Operating Leases. The Company will not, and will not
permit any of its Subsidiaries to, become or remain liable in any way, whether
directly or by assignment or as a guarantor or other surety, for the obligations
of the lessee under any operating lease (other than intercompany leases between
Company and its Subsidiaries), if the aggregate amount of all rents paid by the
Company and its Subsidiaries under all such operating leases would exceed
$25,000,000 in any fiscal year of the Company.
SECTION 7.13. Sales and Lease-Backs. The Company will not, and
will not permit any of its Subsidiaries to, become or remain liable as lessee or
as guarantor or other surety with respect to any lease of any property whether
real or personal or mixed or whether now
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69
owned or hereafter acquired that the Company or any of its Subsidiaries has sold
or transferred or intends to sell or transfer to any other Person.
SECTION 7.14. Payment of Certain Indebtedness.
(a) The Company will not, and will not permit any of its
Subsidiaries to, purchase, redeem, retire or otherwise acquire for value, or set
apart any money for a sinking, defeasance or other analogous fund for the
purchase, redemption, retirement or other acquisition of, or make any voluntary
payment or prepayment of the principal of or interest on, or any other amount
owing in respect of, any of the Existing Senior Subordinated Notes, except for
regularly scheduled payments of interest in respect thereof required to be made
pursuant to the terms thereof (and subject to the subordination provisions
applicable thereto).
(b) The Company will not, and will not permit any of its
Subsidiaries to, purchase, redeem, retire or otherwise acquire for value, or set
apart any money for a sinking, defeasance or other analogous fund for the
purchase, redemption, retirement or other acquisition of, or make any voluntary
payment or prepayment of the principal of or interest on, or any other amount
owing in respect of, any of the Existing Senior Notes or Indebtedness permitted
under Section 7.01(f), except regularly scheduled payments of interest in
respect thereof required pursuant to the instruments evidencing such
Indebtedness (and, in the case of any subordinated Indebtedness, subject to the
subordination provisions applicable thereto).
(c) The Company will not, and will not permit any of its
Subsidiaries to, purchase, redeem, retire or otherwise acquire for value, or set
apart any money for a sinking, defeasance or other analogous fund for the
purchase, redemption, retirement or other acquisition of, or make any voluntary
payment or prepayment of the principal of or interest on, or any other amount
owing in respect of, the Motorola Obligations (other than any Motorola Vendor
Financing referred to in clause (b) or (c) of the definition thereof) or any
Indebtedness of the Company and/or its Subsidiaries that is guaranteed by
Motorola, except for (i) regularly scheduled payments thereof required pursuant
to the terms thereof (and subject to any subordination provisions applicable
thereto set forth in the Motorola Consent), (ii) with respect to any revolving
credit facility, the prepayment and reborrowing of loans thereunder, (iii) other
payments or prepayments thereof made from that portion of Excess Cash Flow not
required to be applied to a prepayment of the Loans pursuant to Section 2.09(f)
(provided that the Company shall have made any prepayment required under Section
2.09(f)), (iv) any Refinancing of the Deferred O&M Amounts with Indebtedness
permitted under Section 7.01(d) and (v) any Refinancing thereof with
Indebtedness permitted under Section 7.01(f), or with the proceeds of any Equity
Issuances, provided that, in the case of this subparagraph (v), (x) at least
$500,000,000 of aggregate Net Available Proceeds from Equity Issuances (other
than Excluded Equity Issuances), Debt Incurrences (other than Excluded Debt
Incurrences) and/or Debt Incurrences pursuant to the Motorola Guarantee
Obligation after the Closing Date shall have been received and used or committed
to be used (and shall have been, or shall be, actually so used within 180 days
of such Equity Issuance or Debt Incurrence) to pay or reimburse Costs and (y)
the Company shall have delivered to the Administrative Agent a certificate of
its chief financial officer (in form and substance reasonably satisfactory to
the Administrative Agent and dated the date of such Refinancing) that the
Company has committed or available funding to
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meet all projected Costs (as set forth in the Approved Budget and, with respect
to Costs for any period not covered by such budget, as reasonably estimated by
the Company's chief financial officer (in light of the Cost projections set
forth in the Financial Projections and other information available at the time
and reasonably considered relevant thereto) and set forth in reasonable detail
in such certificate) of the Company and its Subsidiaries to (but not including)
the Maturity Date, which funding may include projected revenues (as so estimated
by the Company's chief financial officer in light of historical performance of
the Iridium Business and other factors reasonably considered relevant at such
time, and set forth in reasonable detail in such certificate) and additional
Indebtedness permitted to be (but not theretofore) incurred under Sections
7.01(b), (c) and (d) that would be guaranteed by Motorola.
(d) The Company will not consent to any modification, supplement
or waiver of any of the provisions of any agreement, instrument or other
document to the extent evidencing or relating to the Indebtedness covered by any
of the foregoing paragraphs of this Section (for purposes of this paragraph (d),
the "Covered Indebtedness"), unless and to the extent (i) such Covered
Indebtedness as so modified or supplemented (or, if applicable, after giving
effect to such waiver) would be permitted to be incurred as new Indebtedness (in
lieu of the Covered Indebtedness) under Section 7.01 and (ii) such modification,
supplement or waiver would not result in the substantial equivalent of a
purchase, redemption, retirement, acquisition, setting aside, payment or
prepayment otherwise prohibited by the foregoing paragraphs of this Section. The
Company shall provide the Administrative Agent with prior written notice of each
proposed modification, supplement or waiver in respect of any such Indebtedness
(and the Administrative Agent shall promptly provide copies thereof to each
Lender). Promptly following the effectiveness of each such modification,
supplement or waiver, the Company shall provide the Administrative Agent with a
copy thereof as executed and delivered by the parties thereto (and the
Administrative Agent shall promptly provide a copy thereof to each Lender).
SECTION 7.15. Organizational Documents. The Company will not, and
will not permit any of its Subsidiaries to, consent to any modification,
supplement or waiver of any of the provisions of the Company LLC Agreement, the
charter or by-laws of any Subsidiary, in each case which could reasonably be
expected to be materially adverse to the interests of the Lenders, without the
prior consent of the Administrative Agent (acting with the approval of the
Required Lenders). The Company shall provide the Administrative Agent with prior
written notice of each proposed modification, supplement or waiver in respect of
thereof not less than 10 Business Days prior to the proposed effective date
thereof (and the Administrative Agent shall promptly provide copies thereof to
each Lender). Promptly following the effectiveness of each such modification,
supplement or waiver, the Company shall provide the Administrative Agent with a
copy thereof as executed and delivered by the parties thereto (and the
Administrative Agent shall promptly provide a copy thereof to each Lender).
SECTION 7.16. Lines of Business. The Company will not, and will
not permit any of its Subsidiaries to, engage to any substantial extent in any
line or lines of business activity other than the Iridium Business.
SECTION 7.17. Fiscal Year. To enable the ready and consistent
determination of compliance with the covenants set forth herein, the Company
shall not change the last day of
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71
its fiscal year from December 31, or the last days of the first three fiscal
quarters in each of its fiscal years from March 31, June 30 or September 30,
respectively.
ARTICLE VIII
CERTAIN BUSINESS-RELATED COVENANTS;
MOTOROLA GUARANTEE OBLIGATION
Until the Commitments have expired or terminated and the principal
of and interest on each Loan and all fees payable hereunder have been paid in
full, the Company covenants and agrees with the Lenders that:
SECTION 8.01. Insurance.
(a) Insurance Maintained by Motorola. The Company will cause
Motorola to procure at its own expense and maintain in full force and effect at
all times the insurance required by the Space System Contract and the O&M
Contract. The Company will, or will cause Motorola to, upon request from time to
time, deliver to the Administrative Agent such evidence of such insurance as may
be reasonably requested by the Administrative Agent (or any Lender through the
Administrative Agent). The Company will cause each other Transaction Party to a
Principal Project Document to procure at its own expense and maintain in full
force and effect at all times the insurance, if any, required by such Project
Document.
(b) Insurance Maintained by the Company. The Company will, and
will cause each of its Subsidiaries to, maintain insurance with financially
sound and reputable insurance companies, and with respect to property and risks
of a character usually maintained by entities engaged in the same or similar
business similarly situated, against loss, damage and liability of the kinds and
in the amounts customarily maintained by such entities. Without limiting the
foregoing, the Company will procure at its own expense and maintain in full
force and effect at all times, with financially sound and reputable insurance
companies, the insurance set forth in Appendix 2. In addition to the insurance
coverage otherwise required by this paragraph (b), the Company will at all times
maintain the insurance coverage required of it under the terms of each of the
Project Documents. The Company will not obtain or carry separate insurance
concurrent in form or contributing in the event of loss with that required by
this Section unless the Administrative Agent is the named insured thereunder,
with loss payable as provided herein. The Company will immediately notify the
Administrative Agent whenever any such separate insurance is obtained and shall
deliver to the Administrative Agent copies of the certificates evidencing the
same.
(c) Certain Insurance Policy Provisions. All policies of insurance
required to be maintained pursuant to this Section covering loss or damage to
any property shall provide that (i) there shall be no recourse against the
Secured Parties for payment of premiums or other amounts with respect thereto,
(ii) the insurer is required to provide the Administrative Agent with at least
30 days' (or ten days' in the case of nonpayment of premiums) prior notice of
reduction in coverage or amount (other than a reduction in coverage or amount
resulting from a payment thereunder), cancellation or non-renewal of any policy
and (iii) the proceeds of all policies (other than in respect of professional
liability, aircraft liability, pollution legal liability, comprehensive
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72
general liability, workers' compensation and comprehensive automobile liability
insurance) shall be payable to the Collateral Agent pursuant to a standard first
mortgagee endorsement, without contribution, substantially equivalent to the New
York standard mortgagee endorsement. The Administrative Agent and the Lender
shall be named as additional insureds on all such liability policies. All
policies (other than in respect of professional liability, aircraft liability,
pollution legal liability, comprehensive general liability, comprehensive
automobile liability and workers' compensation insurance) shall insure the
interests of the Secured Parties regardless of any breach or violation by the
Company of warranties, declarations or conditions contained in such policies,
any action or inaction of the Company or others, or any foreclosure relating to
the Iridium Business or any change in ownership of all or any portion of the
Company. The Company shall comply with the orders, rules and regulations of the
American Insurance Association or any other body now or hereafter constituted
exercising similar functions which are at any time applicable to the Iridium
Business (except any thereof the non-compliance with which could not reasonably
be expected to result in a Material Adverse Effect or which could not adversely
effect the availability or the effectiveness of insurance coverage required by
this Section).
(d) Copies of Insurance Certificates. The Company will deliver to
the Administrative Agent, within 30 days after the end of each fiscal year of
the Company, a certificate of a Responsible Officer:
(i) confirming that all insurance policies required pursuant to
this Section are in force on the date thereof;
(ii) confirming the names of the insurers issuing such policies;
(iii) confirming the amounts and expiration date or dates of such
policies;
(iv) including copies of certificates evidencing such policies
marked "premium paid" or accompanied by other evidence of such payment
reasonably satisfactory to the Administrative Agent; and
(v) stating that such policies comply with the requirements of
this Section.
Such certificate shall be accompanied by a certificate of a nationally
recognized independent insurance broker reasonably satisfactory to the
Administrative Agent (an "Acceptable Insurance Broker"), to the effect specified
in the foregoing clauses of this paragraph (d).
(e) Copies of Insurance Policies. Promptly upon receipt thereof
after the Closing Date, the Company will deliver to the Administrative Agent a
duplicate, certified by an Acceptable Insurance Broker, of each policy of
insurance required to be in effect hereunder, bearing a notation evidencing
payment of the premium therefor or accompanied by other proof of payment
reasonably satisfactory to the Administrative Agent. Not less than 15 days prior
to the expiration date of any policy of insurance required to be in effect
hereunder, the Company shall deliver to the Administrative Agent a certificate
of insurance with respect to each renewal policy, certified by an Acceptable
Insurance Broker, bearing a notation evidencing payment of the premium therefor
or accompanied by other proof of payment reasonably satisfactory to the
Administrative Agent. Promptly after receipt thereof by the Company, the Company
shall
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73
deliver to the Administrative Agent a duplicate, certified by an Acceptable
Insurance Broker, of each such renewal policy.
(f) Right to Procure Insurance. In the event the Company fails, or
fails to cause Motorola, to procure or maintain the full insurance coverage
required by this Section, the Administrative Agent and the Required Lenders,
upon 10 days' prior notice (unless such insurance coverage would lapse within
such period, in which event notice should be given as soon as reasonably
possible) to the Company of any such failure, may (but shall not be obligated
to) take out the required policies of insurance and pay the premiums on the
same. All amounts so advanced therefor by the Administrative Agent and the
Lenders shall become an additional obligation of the Company to the
Administrative Agent and the Lenders, and the Company shall forthwith pay such
amounts to the Administrative Agent, together with interest thereon at the
Post-Default Rate from the date so advanced.
(g) Notice of Event of Loss or Change in Insurance Coverage. The
Company shall promptly notify the Administrative Agent and each Lender upon
obtaining knowledge of any Event of Loss that could reasonably be expected to
result in loss or damage exceeding $2,000,000. The Administrative Agent shall
promptly notify each Lender of each written notice received by it with respect
to the cancellation of, adverse change in, or default under, any insurance
policy required to be maintained in accordance with this Section.
SECTION 8.02. Accounts. The Company will not, and will not permit
any of its Subsidiaries to, maintain any deposit or other similar account with
any financial institution other than Permitted Investments and as permitted or
contemplated under the Depositary Agreement.
SECTION 8.03. Approved Budget; Financial Projections.
(a) On or before February 1 of each fiscal year, the Company
through its board of directors shall adopt an Annual Budget for such fiscal
year; provided that the aggregate Costs for the Annual Budget for the fiscal
year ending on December 31, 1999 shall be substantially similar to the aggregate
Cost projections for such fiscal year as set forth in the Financial Projections.
From and after the adoption of an Approved Budget, the Company shall not amend
or otherwise modify such Approved Budget without the prior written consent of
the Required Lenders if the effect of such amendment or modification is to
increase the aggregate Costs budgeted in such Annual Budget above the Approved
Budgeted Amount as originally in effect upon the adoption of such budget. The
Company will furnish the Administrative Agent and the Lenders with certified
copies of each Approved Budget (or any amendment or modification thereof)
promptly following the adoption thereof by its board of directors or approval
thereof by the Company.
(b) For any period covered by an Approved Budget, the Company will
not incur Costs required to be paid, or make payment for Costs, during any
Budget Period exceeding the Approved Budget Amount for such period.
(c) If at any time after the date hereof the Company shall prepare
and have approved by the board of directors of the Company financial projections
for the Iridium Business it shall promptly furnish a copy thereof to the
Administrative Agent and the Lenders, together
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with a certificate of a Responsible Officer that such projections have been
prepared by the Company in good faith on the basis of information and
assumptions that the Company believed to be reasonable as of the date of such
projections.
SECTION 8.04. Principal Project Documents.
(a) Performance of Obligations and Enforcement of Rights. The
Company will, and will cause each of its Subsidiaries to, (i) perform and
observe in all material respects all of its covenants and obligations contained
in each of the Principal Project Documents to which it is a party, (ii) take all
reasonable and necessary action to prevent the termination or cancellation of
any Principal Project Documents other than in accordance with the terms thereof
and (iii) use commercially reasonable efforts to enforce against the relevant
Transaction Party thereto each material covenant or obligation of such Principal
Project Document in accordance with its terms. Anything in the foregoing to the
contrary notwithstanding, the Company shall pay, or cause to be paid, when due,
all claims for labor, material, supplies or services (under the Principal
Project Documents or otherwise) that, if unpaid could by law result in a Lien on
the property of the Company or any Subsidiary, other than a Permitted Lien;
provided that the Company shall have the right to contest in good faith by
appropriate proceedings diligently conducted the validity or amount of such
claim, so long as adequate reserves have been established with respect thereto
in accordance with GAAP.
(b) Cancellation; Termination; Amendments, Etc. The Company will
not, without the prior consent of the Required Lenders, (i) cancel or terminate
any Principal Project Document to which it is a party or consent to or accept
any cancellation or termination thereof, (ii) sell, assign (other than pursuant
to the Security Documents) or otherwise dispose of (by operation of law or
otherwise) any part of its interest in any Principal Project Document, (iii)
waive any default under, or breach of, any Principal Project Document or waive,
fail to use commercially reasonable efforts to enforce, forgive, compromise,
settle, adjust or release any right, interest or entitlement, howsoever arising,
under, or in respect of any Principal Project Document or in any way vary, or
agree to the variation of, any provision of such Principal Project Document or
of the performance of any covenant or obligation by any Person under any
Principal Project Document, (iv) exercise any right to initiate an arbitration
proceeding under any Principal Project Document or take any action with respect
to any arbitration proceeding initiated by any other Transaction Party or
compelled by the provisions of any Principal Project Document, (v) petition,
request or take any other legal or administrative action that seeks, or may
reasonably be expected, to materially Impair any Principal Project Document,
(vi) consent, or agree to consent, to any Person party to a Principal Project
Document to assign or delegate its right under such Principal Project Document,
or (vii) amend, supplement or modify any Principal Project Document, unless (in
the case of any actions covered in clauses (i) through (vii) above) (x) the
monetary obligations of the Company or its Subsidiaries under such Principal
Project Document after giving effect to such amendment, supplement or
modification, together with any additional Costs resulting from any action under
this Section or Section 8.05, would not cause the aggregate Costs for the Budget
Period to exceed the Approved Budget Amount or (y) the performance by the
Company or any of its Subsidiaries of any non-monetary obligations under such
Project Document after giving effect to such amendment, supplement, modification
or termination could not reasonably be expected to result in a Material Adverse
Effect. Promptly
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after the execution and delivery thereof, the Company shall furnish the
Administrative Agent and the Lenders with certified copies of all amendments,
supplements or modifications of any Principal Project Document.
SECTION 8.05. Other Project Documents.
(a) Additional Project Documents; Additional Costs. The Company
will not, and will not permit any of its Subsidiaries to, enter into any Other
Project Document, or otherwise incur any other obligation or expend any amount
in respect of Costs, without the prior consent of the Required Lenders, unless
(i) the monetary obligations of the Company or such Subsidiary under such Other
Project Document or the incurrence of such obligation or the expenditure of such
amount, as the case may be, together with any additional Costs resulting from
any action under this Section or Section 8.04, would not cause the aggregate
Costs for the Budget Period to exceed the Approved Budget Amount or (ii) the
performance by the Company or such Subsidiary of any non-monetary obligations
under such Other Project Document could not reasonably be expected to result in
a Material Adverse Effect.
(b) Cancellation; Termination; Amendments, Etc. The Company will
not, without the prior consent of the Required Lenders: (i) cancel or terminate
any Other Project Document to which it is a party or consent to or accept any
cancellation or termination thereof, (ii) sell, assign (other than pursuant to
the Security Documents) or otherwise dispose of (by operation of law or
otherwise) any part of its interest in any Other Project Document, (iii) waive
any default under, or breach of, any Other Project Document or waive, fail to
enforce, forgive, compromise, settle, adjust or release any right, interest or
entitlement, howsoever arising, under, or in respect of any Other Project
Document or in any way vary, or agree to the variation of, any provision of such
Other Project Document or of the performance of any covenant or obligation by
any Person under any Project Document, (iv) exercise any right to initiate an
arbitration proceeding under any Project Document or take any action with
respect to any arbitration proceeding initiated by any other Person or compelled
by the provisions of any Other Project Document (except, in each case, upon
instructions of the Required Lenders), (v) petition, request or take any other
legal or administrative action that seeks, or may reasonably be expected, to
Impair any Other Project Document or amend, modify or supplement any Project
Document, (vi) amend, supplement or modify any Other Project Document or (vii)
consent, or agree to consent, to any Person party to any Other Project Document
assigning or delegating its rights and obligations under such Other Project
Document, unless (in the case of any of the actions covered in clauses (i)
through (vii) above) the taking of such action, or omitting to take such action,
(x) together with any additional Costs resulting from any actions under this
Section and Section 8.04, would not cause the aggregate Costs for the Budget
Period to exceed the Approved Budget Amount or (y) could not reasonably be
expected to result in a Material Adverse Effect. Upon request of the
Administrative Agent, the Company shall furnish the Administrative Agent and the
Lenders with certified copies of each Other Project Document and all amendments,
supplements or modifications thereto.
(c) Performance of Obligations and Enforcement of Rights. The
Company will, and will cause each of its Subsidiaries to, (i) perform and
observe all of its covenants and obligations contained in each of the Other
Project Documents to which it is a party, (ii) take all
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reasonable and necessary action to prevent the termination or cancellation of
any Other Project Documents other than in accordance with the terms thereof and
(iii) enforce against the relevant party thereto each covenant or obligation of
such Other Project Document other than in accordance with its terms, unless, in
the case of each of clauses (i) through (iii) above, the failure to take any
such action could not reasonably be expected to result in a Material Adverse
Effect.
SECTION 8.06. Restoration. Subject to Section 4.02(b) of the
Depositary Agreement and Section 2.09(d), the Company shall have the right to
Restore any of its property that is the subject of an Event of Loss (whether or
not insured against or insurable), provided that in the event that the Company
elects not to restore any such property the Net Available Proceeds of such Event
of Loss (if any) shall be required to be applied in accordance with Section
2.09(d).
SECTION 8.07. Performance Standards. The Company will maintain, or
cause to be maintained, the Iridium System in a manner consistent with the
achievement of the Financial Projections, including but not limited to
Motorola's continuing performance under the O&M Contract, except to the extent
of temporary degradation in performance of the Iridium System that is either not
reasonably likely to result in a Material Adverse Effect or is cured within 20
days following the event causing such degradation; provided that there shall be
at least 68 operational satellites in orbit (or, if less than 68, 66 operational
satellites in mission orbit).
SECTION 8.08. Minimum Regulatory Approvals. The Company will
maintain, or cause to be maintained, all Government Approvals necessary for the
Company to provide satellite voice service in a sufficient number of
jurisdictions, such that the percentage of revenues under the Iridium business
plan anticipated to be generated by such jurisdictions shall be no less than (a)
72.5%, except to the extent the failure to maintain such Government Approvals
could not reasonably be expected to result in a Material Adverse Effect or (b)
66-2/3% for any period of more than 30 consecutive days.
SECTION 8.09. Motorola Guarantee Obligation.
(a) Not later than seven Business Days after the occurrence of any
Trigger Event, the Company will require Motorola to perform the Motorola
Guarantee Obligation (to the extent of a maximum amount of $300,000,000), such
performance to include the execution and delivery by Motorola of its guarantee,
in a form identical in all material respects (except as to the amount covered by
such guarantee) to the guarantee executed by Motorola in connection with the
Motorola Guaranteed Credit Agreement or otherwise as mutually agreed between all
of the Lenders and Motorola, in favor of the Administrative Agent for the
benefit of the Lenders in respect of the Borrower's obligations under this
Agreement in a maximum amount of $300,000,000 (inclusive of principal, interest
and other amounts) (the "Motorola Guarantee"). The Company agrees that at any
time prior to a termination under paragraph (b) or a release under paragraph (c)
of this Section, the Company will not, without the prior consent of the Required
Lenders, (i) direct or otherwise require Motorola to perform under the Motorola
Guarantee Obligation with respect to $300,000,000 of such obligation by
executing and delivering the Motorola Guarantee, except as contemplated by this
Section or (ii) consent to any modification, supplement or waiver of any of the
provisions of the MOU Agreements relating to the Motorola Guarantee Obligation
(but only to the extent covered by the first sentence above). The Company shall
provide the Administrative Agent with prior written notice of each proposed
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modification, supplement or waiver in respect of any MOU Agreement (and the
Administrative Agent shall promptly provide copies thereof to each Lender).
Promptly following the effectiveness of each such modification, supplement or
waiver, the Company shall provide the Administrative Agent with a copy thereof
as executed and delivered by the parties thereto (and the Administrative Agent
shall promptly provide a copy thereof to each Lender).
(b) The Company's obligation to require Motorola to provide the
Motorola Guarantee under paragraph (a) of this Section will terminate in full on
the date (the "Guarantee Obligation Termination Date") on which each of the
following conditions is satisfied:
(i) on the Guarantee Obligation Termination Date no Default shall
have occurred and be continuing; and
(ii) the Company shall have delivered to the Administrative Agent
a certificate of its chief financial officer (in form and substance
reasonably satisfactory to the Administrative Agent) (x) confirming the
Company's compliance with the requirements of Section 8.07 as of the
Guarantee Obligation Termination Date and (y) to the effect that no
Default shall have occurred and be continuing as of such date; and
(iii) the Company shall have delivered to the Administrative Agent
a certificate of its chief financial officer (in form and substance
reasonably satisfactory to the Administrative Agent) that, as of the
Guarantee Obligation Termination Date, the Company has committed or
available funding to meet all projected Costs (as set forth in the
Approved Budget and, with respect to Costs for any period not covered by
such budget, as reasonably estimated by the Company's chief financial
officer (in light of the Cost projections set forth in the Financial
Projections and other information available at the time and reasonably
considered relevant thereto) and set forth in reasonable detail in such
certificate) of the Company and its Subsidiaries to (but not including)
the Maturity Date, which funding may include projected revenues (as so
estimated by the Company's chief financial officer in light of historical
performance of the Iridium Business and other factors reasonably
considered relevant at such time, and set forth in reasonable detail in
such certificate) and additional Indebtedness permitted to be (but not
theretofore) incurred under Sections 7.01(b), (c) and (d) that would be
guaranteed by Motorola; and
either
(iv) the Company shall have received proceeds from Equity
Issuances (other than Equity Issuances referred to in clauses (a) and (b)
of the definition of "Excluded Equity Issuances" and any Equity Issuance
resulting from the exercise of the Reserve Capital Call Obligations)
after the Closing Date and prior to February 28, 1999 of at least
$250,000,000 (less reasonable underwriting fees) (and the Company shall
have delivered to the Administrative Agent a certificate of its chief
financial officer to such effect (in form and substance reasonably
satisfactory to the Administrative Agent)); or
(v) (x) the Company shall have received proceeds from Equity
Issuances (other than any Equity Issuance referred to in clauses (a) and
(b) of the definition of "Excluded Equity Issuance" and any Equity
Issuance resulting from the exercise of the Reserve
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78
Capital Call Obligations) after the Closing Date and prior to February
28, 1999 of at least $150,000,000 (less reasonable underwriting fees) and
either (y) together with the proceeds included under subclause (x) above,
the Company shall have received proceeds from such Equity Issuances after
the Closing Date of at least $250,000,000 (less reasonable underwriting
fees) or (z) Cumulative Adjusted Accrued Revenues as at the last day of
any month specified below (or any month prior thereto) shall be at least
equal to the amount set forth opposite such specified month (and the
Company shall have delivered to the Administrative Agent a certificate of
its chief financial officer to such effect (in form and substance
reasonably satisfactory to the Administrative Agent)):
<TABLE>
<CAPTION>
Month Minimum Cumulative
----- ------------------
(1999) Adjusted Accrued Revenues
----- -------------------------
<S> <C>
June $265,000,000
July 350,000,000
August 425,000,000
</TABLE>
(c) Following the execution and delivery of the Motorola Guarantee
under paragraph (a) of this Section, the Motorola Guarantee will thereafter be
released in full on the date (the "Guarantee Obligation Release Date") on which
each of the following conditions is satisfied (and the Administrative Agent is
hereby authorized to effect such release upon the satisfaction of such
conditions without further consent of the Lenders):
(i) on the Guarantee Obligation Release Date no Default shall have
occurred and be continuing; and
(ii) the Company shall have delivered to the Administrative Agent
a certificate of its chief financial officer (in form and substance
reasonably satisfactory to the Administrative Agent) (x) confirming the
Company's compliance with the requirements of Section 8.07 as of the
Guarantee Obligation Release Date and (y) to the effect that no Default
shall have occurred and be continuing as of such date; and
(iii) the Company shall have delivered to the Administrative Agent
a certificate of its chief financial officer (in form and substance
reasonably satisfactory to the Administrative Agent) that, as of the
Guarantee Obligation Release Date, the Company has committed or available
funding to meet all projected Costs (as set forth in the Approved Budget
and, with respect to Costs for any period not covered by such budget, as
reasonably estimated by the Company's chief financial officer (in light
of the Cost projections set forth in the Financial Projections and other
information available at the time and reasonably considered relevant
thereto) and set forth in reasonable detail in such certificate) of the
Company and its Subsidiaries to (but not including) the Maturity Date,
which funding may include projected revenues (in light of historical
performance of the Iridium Business and other factors reasonably
considered relevant, and set forth in reasonable detail in such
certificate) and additional Indebtedness permitted to be (but not
theretofore) incurred under Sections 7.01(b), (c) and (d) that would be
guaranteed by Motorola; and
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79
(iv) the Company shall have received proceeds from Equity
Issuances (other than Equity Issuances referred to in clauses (a) and (b)
of the definition of "Excluded Equity Issuances") and any Equity Issuance
resulting from the exercise of the Reserve Capital Call Obligations)
after the Closing Date of at least $250,000,000 (less reasonable
underwriting fees) (and the Company shall have delivered to the
Administrative Agent a certificate of its chief financial officer to such
effect (in form and substance reasonably satisfactory to the
Administrative Agent)); and
(v) Cumulative Adjusted Accrued Revenues as at the last day of any
month specified below (or any month prior thereto) shall be at least
equal to the amount set forth opposite such specified month (and the
Company shall have delivered to the Administrative Agent a certificate of
its chief financial officer to such effect (in form and substance
reasonably satisfactory to the Administrative Agent)):
<TABLE>
<CAPTION>
Month Minimum Cumulative
----- ------------------
(1999) Adjusted Accrued Revenues
----- -------------------------
<S> <C>
June $265,000,000
July 350,000,000
August 425,000,000
</TABLE>
Prior to the release of the Motorola Guarantee under this paragraph (c), the
maximum amount of the Motorola Guarantee will be reduced from time to time on a
ratable basis with any prepayments of the Loans pursuant to Section 2.08 or
2.09.
ARTICLE IX
EVENTS OF DEFAULT
If any of the following events ("Events of Default") shall occur:
SECTION 9.01. Iridium Events of Defaults.
(a) the Company shall fail to pay any principal of any Loan when
and as the same shall become due and payable, whether at the due date thereof or
at a date fixed for prepayment thereof or otherwise; or
(b) the Company shall fail to pay any interest on any Loan or any
fee under this Agreement or under any other Credit Document when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment thereof or otherwise and such default shall continue unremedied
for three or more Business Days; or
(c) the Company shall fail to pay any other amount (other than the
amounts covered under clause (a) or (b) above) payable under this Agreement or
under any other Credit Document when and as the same shall become due and
payable, whether at the due date thereof
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80
or at a date fixed for prepayment thereof or otherwise and such default shall
continue unremedied for fifteen or more days; or
(d) any representation or warranty made or deemed made by the
Company or any of its Subsidiaries or Iridium LLC in or pursuant to this
Agreement or any other Credit Document to which it is a party or any amendment
or modification hereof or thereof, or in any report, certificate, financial
statement or other document furnished pursuant to or in connection with this
Agreement or any other Credit Document or any amendment or modification hereof
or thereof, shall prove to have been incorrect in any material respect when made
or deemed made; or
(e) the Company shall fail to observe or perform any covenant,
condition or agreement contained in Section 5.02(a) or 6.01 (with respect to the
Company's existence) or in Article VII (other than Sections 7.06 and 7.09) or
VIII (other than Section 8.01); or
(f) the Company shall default in the performance of any of its
obligations contained in Section 4.01(d) of the Depositary Agreement; after the
Closing Date the Company or any other Credit Party shall default in the
performance of any of its obligations contained in Section 4.04(d) of the
Security Agreement; or
(g) any Credit Party or Iridium LLC shall fail to observe or
perform any covenant, condition or agreement contained in this Agreement (in the
case of the Company) (other than those specified in clauses (a) through (f)
above (inclusive) of this Section) or any other Credit Document to which it is a
party and such failure shall continue unremedied for a period of 30 days after
notice thereof from the Administrative Agent (given at the request of any
Lender) to the Company; or
(h) the Company or any of its Subsidiaries or Iridium LLC shall
default in the payment when due (after the expiration of applicable grace
periods) of any principal of or interest on any of its other Indebtedness having
an outstanding principal amount of $10,000,000 individually or in the aggregate;
or any event specified in any note, agreement, indenture or other document
evidencing or relating to any such Indebtedness shall occur if the effect of
such event is to cause, or (with the giving of any notice or the lapse of time
or both) to permit the holder or holders of such Indebtedness (or a trustee or
agent on behalf of such holder or holders) to cause, such Indebtedness to become
due, or to be prepaid in full (whether by redemption, purchase, offer to
purchase or otherwise), prior to its stated maturity or to have the interest
rate thereon reset to a level so that securities evidencing such Indebtedness
trade at a level specified in relation to the par value thereof; or
(i) the Company or one or more of its Subsidiaries or Iridium LLC
shall (i) apply for or consent to the appointment of, or the taking of
possession by, a receiver, custodian, trustee, examiner or liquidator of itself
or of all or a substantial part of its Property, (ii) make a general assignment
for the benefit of its creditors, (iii) commence a voluntary case under the U.
S. Bankruptcy Code, (iv) file a petition seeking to take advantage of any other
law relating to bankruptcy, insolvency, reorganization, liquidation,
dissolution, arrangement or winding-up, or composition or readjustment of debts,
(v) fail to controvert in a timely and appropriate manner, or acquiesce in
writing to, any petition filed against it in an involuntary case
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81
under the U.S. Bankruptcy Code or (vi) take any corporate or other analogous
action for the purpose of effecting any of the foregoing; or
(j) a proceeding or case shall be commenced, without the
application or consent of the Company or one or more Subsidiaries or Iridium LLC
in any court of competent jurisdiction, seeking (i) its reorganization,
liquidation, dissolution, arrangement or winding-up, or the composition or
readjustment of its debts, (ii) the appointment of a receiver, custodian,
trustee, examiner, liquidator or the like of the Company or such Subsidiary or
Iridium LLC, as the case may be, or of all or any substantial part of its
Property or (iii) similar relief in respect of the Company or such Subsidiary or
Iridium LLC, as the case may be, under any law relating to bankruptcy,
insolvency, reorganization, winding-up, or composition or adjustment of debts,
and such proceeding or case shall continue undismissed, or an order, judgment or
decree approving or ordering any of the foregoing shall be entered and continue
unstayed and in effect, for a period of 60 or more days; or an order for relief
against the Company or one or more Subsidiaries or Iridium LLC shall be entered
in an involuntary case under the U.S. Bankruptcy Code; or
(k) a final judgment or judgments for the payment of money of
$10,000,000 or more in the aggregate (exclusive of judgment amounts fully
covered by insurance where the insurer has admitted liability in respect of such
judgment) shall be rendered by one or more courts, administrative tribunals or
other bodies having jurisdiction against the Company or any of its Subsidiaries
or Iridium LLC and the same shall not be discharged (or provision shall not be
made for such discharge), or a stay of execution thereof shall not be procured,
within 30 days from the date of entry thereof and the Company, the relevant
Subsidiary or Iridium LLC, as the case may be, shall not, within said period of
30 days, or such longer period during which execution of the same shall have
been stayed, appeal therefrom and cause the execution thereof to be stayed
during such appeal; or
(l) an ERISA Event shall have occurred which, when taken together
with all other ERISA Events that have occurred, could reasonably be expected to
result in a Material Adverse Effect; or
(m) the Company or any of its Subsidiaries or Iridium LLC shall be
terminated, dissolved or liquidated (as a matter of law or otherwise) or
proceedings shall be commenced by any Person (including the Company) seeking the
termination, dissolution or liquidation of the Company or such Subsidiary or
Iridium LLC, as the case may be, other than as permitted under Section 7.03; or
(n) an Environmental Claim arising with respect to the Iridium
Business shall have been asserted against the Iridium Business or any Credit
Party or Iridium LLC which could reasonably be expected to result in a Material
Adverse Effect; or
(o) the Company or any of its Subsidiaries shall fail to obtain
(or obtain the benefit of), renew, maintain or comply in all material respects
with the FCC License (from and after the transfer thereof by Motorola to the
Company pursuant to the Space System Contract), any other Telecommunications
Approval or any other Government Approval required for the Iridium Business; or
the FCC License (from and after the transfer thereof by Motorola to the Company
pursuant to the Space System Contract) or any such Telecommunications Approval
or
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<PAGE> 87
82
any other Government Approval shall be materially Impaired in whole or in
part or shall cease to be in full force and effect; or any action, suit,
proceeding or investigation shall be commenced by or before any Government
Authority which could reasonably be expected to result in such Impairment and
(in any case) such Impairment could reasonably be expected to result in a
Material Adverse Effect; or
(p) the Liens created by the Security Documents shall at any time
after the Closing Date not constitute a valid and perfected Lien on the
Collateral intended to be covered thereby (to the extent perfection by filing,
registration, recordation or possession is required herein or therein) in favor
of the Collateral Agent, free and clear of all other Liens (other than Permitted
Liens); or
(q) any material provision of any Credit Document or Principal
Project Document to which any Credit Party or Iridium LLC is a party shall at
any time for any reason cease to be valid and binding or in full force and
effect (except, in the case of any of the Credit Documents, for expiration or
termination in accordance with its respective terms); or any such Credit
Document or Principal Project Document shall be materially Impaired in whole or
part; or the validity or enforceability of any such Credit Document or Principal
Project Document shall be contested by any Credit Party or Iridium LLC, as the
case may be; or any Credit Party shall deny that it has any or further liability
or obligation under any such Credit Document or Principal Project Document; or
(r) any material provision of any Transaction Document to which
any Credit Party or Iridium LLC is a party shall at any time for any reason
cease to be valid and binding or in full force and effect; or any such
Transaction Document shall be Impaired in whole or part; or the validity or
enforceability of any such Transaction Document shall be contested by any Credit
Party or Iridium LLC; or any Credit Party or Iridium LLC shall deny that it has
any or further liability or obligation under any such Transaction Document; and
(in any case) such event could reasonably be expected to result in a Material
Adverse Effect; or
(s) Iridium LLC shall cease to be the sole member of the Company
or any Subsidiary of the Company shall cease to be a Wholly Owned Subsidiary;
SECTION 9.02. Motorola Events of Default.
(a) any representation or warranty made or deemed made by Motorola
in or pursuant to any Motorola Agreement or any amendment or modification
thereof, or in any report, certificate, financial statement or other document
furnished by Motorola pursuant thereto or in connection therewith shall prove to
have been incorrect in any material respect when made or deemed made; or
(b) Motorola shall fail to observe or perform any covenant,
condition or agreement contained in Articles IV, V and VI of the Motorola
Consent; or
(c) Motorola shall fail to observe or perform any material
covenant, condition or agreement (including, without limitation, any payment
obligation of Motorola) contained in any of the Motorola Agreements or the
Principal Project Documents to which Motorola is a party
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83
(other than those specified in clause (a) and (b) above of this Section) and
such failure shall continue unremedied for a period of 30 days after notice
thereof from the Administrative Agent (given at the request of any Lender) to
the Company and Motorola; or
(d) Motorola or any of the Motorola Domestic Subsidiaries shall
(i) apply for or consent to the appointment of, or the taking of possession by,
a receiver, custodian, trustee, examiner or liquidator of itself or of all or a
substantial part of its property, (ii) make a general assignment for the benefit
of its creditors, (iii) commence a voluntary case under the U. S. Bankruptcy
Code, (iv) file a petition seeking to take advantage of any other law relating
to bankruptcy, insolvency, reorganization, liquidation, dissolution, arrangement
or winding-up, or composition or readjustment of debts, (v) fail to controvert
in a timely and appropriate manner, or acquiesce in writing to, any petition
filed against it in an involuntary case under the U.S. Bankruptcy Code or (vi)
take any corporate or other analogous action for the purpose of effecting any of
the foregoing; or
(e) a proceeding or case shall be commenced, without the
application or consent of Motorola, against Motorola or any of the Motorola
Domestic Subsidiaries, in any court of competent jurisdiction, seeking (i) its
reorganization, liquidation, dissolution, arrangement or winding-up, or the
composition or readjustment of its debts, (ii) the appointment of a receiver,
custodian, trustee, examiner, liquidator or the like of Motorola or such
Motorola Domestic Subsidiary or of all or any substantial part of its property
or (iii) similar relief in respect of Motorola or such Motorola Domestic
Subsidiary under any law relating to bankruptcy, insolvency, reorganization,
winding-up, or composition or adjustment of debts, and such proceeding or case
shall continue undismissed, or an order, judgment or decree approving or
ordering any of the foregoing shall be entered and continue unstayed and in
effect, for a period of 60 or more days; or an order for relief against Motorola
or such Motorola Domestic Subsidiary shall be entered in an involuntary case
under the U.S. Bankruptcy Code; or
(f) Motorola or any of the Motorola Domestic Subsidiaries shall
admit in writing its inability to, or be generally unable to, pay its debts as
such debts become due; or
(g) Motorola or any of the Motorola Domestic Subsidiaries shall
default in the payment when due (after the expiration of applicable grace
periods) of any principal of or interest on any of its Indebtedness aggregating
in amount at least equal to 3% of the amount of total stockholders' equity for
Motorola and its consolidated Subsidiaries (determined on a consolidated basis
without duplication in accordance with generally accepted accounting principles)
as at the last day of the most recently completed fiscal quarter of Motorola
("Motorola's Net Worth"); or any event specified in any note, agreement,
indenture or other document evidencing or relating to any such Indebtedness
shall occur if the effect of such event is to cause, or (with the giving of any
notice or the lapse of time or both) to permit the holder or holders of such
Indebtedness (or a trustee or agent on behalf of such holder or holders) to
cause, such Indebtedness to become due, or to be prepaid in full (whether by
redemption, purchase, offer to purchase or otherwise), prior to its stated
maturity or to have the interest rate thereon reset to a level so that
securities evidencing such Indebtedness trade at a level specified in relation
to the par value thereof; or
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84
(h) a final judgment or judgments for the payment of money in
excess of 3% of Motorola's Net Worth (exclusive of judgment amounts fully
covered by insurance where the insurer has admitted liability in respect of such
judgment) shall be rendered by one or more courts, administrative tribunals or
other bodies having jurisdiction against the Motorola or any of the Motorola
Domestic Subsidiaries and the same shall not be discharged (or provision shall
not be made for such discharge), or a stay of execution thereof shall not be
procured, within 60 days from the date of entry thereof and Motorola or the
relevant Motorola Domestic Subsidiary shall not, within said period of 60 days,
or such longer period during which execution of the same shall have been stayed,
appeal therefrom and cause the execution thereof to be stayed during such
appeal; or
(i) prior to the transfer of the FCC License to the Company
pursuant to the Space System Contract, Motorola shall fail to obtain, renew,
maintain or comply in all material respects with the FCC License or the FCC
License shall be materially Impaired or shall cease to be in full force and
effect; or any action, suit, proceeding or investigation shall be commenced by
or before any Government Authority which could reasonably be expected to result
in such Impairment and (in any case) such Impairment could reasonably be
expected to result in a Material Adverse Effect; or
(j) at any time after the execution and delivery of the Motorola
Pledge Agreement but prior to the transfer of the FCC License by Motorola to the
Company pursuant to the Space System Contract, the Liens created by the Motorola
Pledge Agreement shall cease to constitute a valid and perfected Lien on the
Collateral intended to be covered thereby (to the extent perfection by filing,
registration, recordation or possession is required herein or therein) in favor
of the Collateral Agent, free and clear of all other Liens; or
(k) any material provision of any Motorola Agreement or any
Principal Project Document to which Motorola is a party shall at any time for
any reason cease to be valid and binding or in full force and effect (except for
termination thereof pursuant to its respective terms, other than as a result of
a default or breach by any party thereto); or any Motorola Agreement (excluding
the Motorola Pledge Agreement, prior to the date of the execution and delivery
thereof) or any such Principal Project Document shall be materially Impaired in
whole or part (except for termination thereof pursuant to its respective terms,
other than as a result of a default or breach by any party thereto); or the
validity or enforceability of any Motorola Agreement (excluding the Motorola
Pledge Agreement, prior to the date of execution and delivery thereof) or any
such Principal Project Document shall be contested by Motorola; or Motorola
shall deny that it has any or further liability or obligation under any Motorola
Agreement (excluding the Motorola Pledge Agreement, prior to the date of
execution and delivery thereof) or any such Principal Project Document (except
after termination thereof pursuant to its respective terms, other than as a
result of a default or breach by any party thereto); or
(l) any gateway equipment purchase agreement and/or agreement for
the manufacture and delivery of handsets and/or paging units shall at any time
for any reason (except for termination thereof pursuant to its respective terms,
other than as a result of a default or breach by any party thereto) cease to be
valid and binding or in full force and effect, or the validity or enforceability
of any such agreement shall be contested by Motorola or Motorola shall
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85
deny that it has any or further liability or obligation under any such
agreement, and (in any case) such event could reasonably be expected to result
in a Material Adverse Effect.
SECTION 9.03. Other Transaction Parties' Events of Default.
(a) any Transaction Party (other than the Credit Parties, Iridium
LLC, Motorola and the Secured Parties) (each an "Other Transaction Party") shall
fail to pay to the Company or any of its Subsidiaries when due any amount
payable by such Other Transaction Party under any Transaction Document to which
it is a party or any Iridium LLC Member shall fail to pay when due any amount in
respect of its Reserve Capital Call Obligations; or
(b) any representation or warranty made or deemed made by any
Other Transaction Party in or pursuant to any Transaction Document to which it
is a party or any amendment or modification thereof, or in any report,
certificate, financial statement or other document furnished pursuant to or in
connection with this Agreement or any such Transaction Document or any amendment
or modification hereof or thereof, shall prove to have been incorrect in any
material respect when made or deemed made; or
(c) any Other Transaction Party shall fail to observe or perform
any covenant, condition or agreement contained in any Transaction Document to
which it is a party and such failure shall continue unremedied for a period of
30 days after notice thereof from the Administrative Agent (given at the request
of any Lender) to the Company and such Other Transaction Party; or
(d) a proceeding or case shall be commenced, without the
application or consent of any Other Transaction Party or its parent company in
any court of competent jurisdiction, seeking (i) its reorganization,
liquidation, dissolution, arrangement or winding-up, or the composition or
readjustment of its debts, (ii) the appointment of a receiver, custodian,
trustee, examiner, liquidator or the like of such Other Transaction Party or of
all or any substantial part of its property or (iii) similar relief in respect
of such Other Transaction Party under any law relating to bankruptcy,
insolvency, reorganization, winding-up, or composition or adjustment of debts,
and such proceeding or case shall continue undismissed, or an order, judgment or
decree approving or ordering any of the foregoing shall be entered and continue
unstayed and in effect, for a period of 60 or more days; or an order for relief
against such Other Transaction Party shall be entered in an involuntary case
under applicable law; or
(e) any Other Transaction Party shall fail to obtain, renew,
maintain or comply in all material respects with any Telecommunications Approval
or any other Government Approval that is required by the terms of any
Transaction Document to which it is a party to be obtained and/or maintained by
such Other Transaction Party and is necessary for the Iridium Business; or any
such Telecommunications Approval or any such other Government Approval shall be
Impaired or shall cease to be in full force and effect; or any action, suit,
proceeding or investigation shall be commenced by or before any Government
Authority which could reasonably be expected to result in such Impairment and
such action, suit or proceeding is reasonably likely to be successful; or
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(f) any material provision of any Transaction Document to which
any Other Transaction Party is a party shall at any time for any reason cease to
be valid and binding or in full force and effect; or any such Transaction
Document shall be Impaired in whole or part; or the validity or enforceability
of any such Transaction Document shall be contested by any Other Transaction
Party or any Government Authority; or any Other Transaction Party shall deny
that it has any or further liability or obligation under any such Transaction
Document;
provided that, in the case of each event under this Section 9.03, such event
shall not be an Event of Default unless the occurrence of such event could
reasonably be expected to result in a Material Adverse Effect;
SECTION 9.04. Other Events of Default.
(a) an announcement by the Company of a decision to abandon or
indefinitely defer the operation of the Iridium System or the abandonment or
indefinite deferral of the operation of the Iridium System; or
(b) a material portion of the Iridium System shall be permanently
condemned or seized or title thereto shall be permanently requisitioned or taken
by any Government Authority under power of eminent domain or otherwise; or a
material portion of the Iridium System shall be temporarily condemned or seized
or title thereto shall be temporarily requisitioned or taken by any Government
Authority under power of eminent domain or otherwise and such temporary
condemnation, seizure, requisition or taking shall last for at least 90 days and
could reasonably be expected to result in a Material Adverse Effect; or
(c) any Event of Loss (other than under Section 9.04(b)) shall
have occurred with respect to a material portion of the Iridium satellite
constellation or the Iridium Business and such Event of Loss could reasonably be
expected to result in a Material Adverse Effect;
then, and in every such event under Sections 9.01, 9.02, 9.03 and 9.04 (other
than an event with respect to any Credit Party or Iridium LLC described in
clause (i) or (j) of Section 9.01, and at any time thereafter during the
continuance of such event, the Administrative Agent may, and at the request of
the Required Lenders shall, by notice to the Company, take any one or more of
the following actions, at the same or different times: (i) terminate the
Commitments, and thereupon the Commitments shall terminate immediately; and (ii)
declare the Loans then outstanding to be due and payable in whole (or in part,
in which case any principal not so declared to be due and payable may thereafter
be declared to be due and payable), and thereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and all
fees and other obligations of the Credit Parties accrued hereunder and under the
other Credit Documents, shall become due and payable immediately, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by each Credit Party, and in case of any event with respect to any
Credit Party or Iridium LLC described in such clause (i) or (j), the Commitments
shall automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and all fees and other obligations of the
Credit Parties accrued hereunder, shall automatically become due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by each Credit Party.
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ARTICLE X
THE AGENTS AND GLOBAL LEAD ARRANGERS
Each of the Lenders hereby irrevocably appoints (a) the
Administrative Agent as its agent hereunder and under the other Credit Documents
to which it is a party and authorizes the Administrative Agent to take such
actions on its behalf and to exercise such powers as are delegated to the
Administrative Agent by the terms hereof or thereof, together with such actions
and powers as are reasonably incidental thereto and (b) the Collateral Agent as
its agent under the Credit Documents to which it is a party and authorizes the
Collateral Agent to take such actions on its behalf and to exercise such powers
as are delegated to the Collateral Agent by the terms thereof, together with
such actions and powers as are reasonably incidental thereto.
The bank serving as the Administrative Agent or the Collateral
Agent hereunder or thereunder shall have the same rights and powers in its
capacity as a Lender as any other Lender and may exercise the same as though it
were not the Administrative Agent or Collateral Agent (as the case may be), and
such bank and its Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with the Company or any Subsidiary or
other Affiliate thereof as if it were not the Administrative Agent or Collateral
Agent (as the case may be) hereunder.
None of the Agents shall have any duties or obligations except
those expressly set forth herein and in the other Credit Documents. Without
limiting the generality of the foregoing, (a) no Agent shall be subject to any
fiduciary or other implied duties, regardless of whether a Default has occurred
and is continuing, (b) no Agent shall have any duty to take any discretionary
action or exercise any discretionary powers, except discretionary rights and
powers expressly contemplated hereby or by the other Credit Documents that (in
the case of the Administrative Agent or the Collateral Agent) such Agent is
required to exercise in writing by the Required Lenders, and (c) except as
expressly set forth herein and in the other Credit Documents, no Agent shall
have any duty to disclose, nor shall any Agent be liable for the failure to
disclose, any information relating to the Company or any of its Subsidiaries
that is communicated to or obtained by the bank serving as an Agent or any of
its Affiliates in any capacity. None of the Agents shall be liable for any
action taken or not taken by it with the consent or at the request of the
Required Lenders or in the absence of its own gross negligence or willful
misconduct. None of the Agents shall be deemed to have knowledge of any Default
unless and until written notice thereof is given to such Agent by the Company or
a Lender. The Administrative Agent shall take such action with respect to such
Default as shall be directed by the Required Lenders, provided that (i) unless
and until the Administrative Agent shall have received such directions, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default as it shall deem
advisable in the best interest of the Lenders except to the extent that this
Agreement expressly requires that such action be taken, or not taken, only with
the consent or upon the authorization of the Required Lenders or all of the
Lenders and (ii) except for action expressly required of the Administrative
Agent hereunder, the Administrative Agent shall in all cases be fully justified
in failing or refusing to take such action unless it shall receive further
assurances to its satisfaction from the Lenders of their indemnification
obligations under Section 11.03(c) against any and all
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liability and expense that may be incurred by it by reason of taking or
continuing to take any such action. None of the Agents shall be responsible for
or have any duty to ascertain or inquire into (i) any statement, warranty or
representation made in or in connection with this Agreement or any other Credit
Document, (ii) the contents of any certificate, report or other document
delivered hereunder or thereunder or in connection herewith or therewith, (iii)
the performance or observance of any of the covenants, agreements or other terms
or conditions set forth herein or therein, (iv) the validity, enforceability,
effectiveness or genuineness of this Agreement, any other Credit Document or any
other agreement, instrument or document, or (v) the satisfaction of any
condition set forth in Article IV or elsewhere herein or therein, other than (in
the case of the Administrative Agent) to confirm receipt of items expressly
required to be delivered to the Administrative Agent. Notwithstanding anything
herein to the contrary (except as provided in Section 11.12(b)), none of the
Documentation Agent or the Global Lead Arrangers, in their respective capacities
as such, shall have any duties, responsibilities or liabilities whatsoever under
this Agreement or the other Credit Documents.
Each Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. Each Agent also may rely
upon any statement made to it orally or by telephone and believed by it to be
made by the proper Person, and shall not incur any liability for relying
thereon. Each Agent may consult with legal counsel (who may be counsel for a
Credit Party), independent accountants and other experts selected by the
Administrative Agent, and shall not be liable for any action taken or not taken
by it in accordance with the advice of any such counsel, accountants or experts.
Each Agent may perform any and all of its duties and exercise its
rights and powers by or through any one or more sub-agents appointed by it in
good faith. Each Agent and any such sub-agent may perform any and all of its
duties and exercise its rights and powers through their respective Related
Parties. The exculpatory provisions of the preceding paragraphs shall apply to
any such sub-agent and to the Related Parties of each Agent and any such
sub-agent, and shall apply to their respective activities in connection with the
syndication of the credit facilities provided for herein as well as activities
as Agent.
Subject to the appointment and acceptance of a successor
Administrative Agent or Collateral Agent as provided in this paragraph, the
Administrative Agent or the Collateral Agent may resign at any time by notifying
the Lenders and the Company. Upon any such resignation, the Required Lenders
shall have the right to appoint a successor thereto with the prior consent of
the Company (which consent shall not be unreasonably withheld or delayed). If no
successor shall have been so appointed by the Required Lenders and shall have
accepted such appointment within 30 days after the retiring Administrative Agent
or Collateral Agent (as the case may be) gives notice of its resignation, then
the retiring Administrative Agent or Collateral Agent (as the case may be) may,
on behalf of the Lenders, appoint a successor Administrative Agent or Collateral
Agent (as the case may be) which shall be a bank with an office in New York, New
York with a combined capital and surplus of at least $500,000,000, or an
Affiliate of any such bank. Upon the acceptance of its appointment as
Administrative Agent or Collateral Agent (as the case may be) hereunder by a
successor, such successor shall succeed to and become vested
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with all the rights, powers, privileges and duties of the retiring
Administrative Agent or Collateral Agent (as the case may be) and the retiring
Administrative Agent or Collateral Agent (as the case may be) shall be
discharged from its duties and obligations hereunder. The fees payable by the
Company to a successor Administrative Agent or Collateral Agent (as the case may
be) shall be the same as those payable to its predecessor unless otherwise
agreed between the Company and such successor. After the Administrative Agent's
or Collateral Agent's (as the case may be) resignation hereunder, the provisions
of this Article and Section 11.03 shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
Administrative Agent or Collateral Agent (as the case may be).
Each Lender acknowledges that it has, independently and without
reliance upon the Agents, the Global Lead Arrangers or any other Lender and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the Agents,
the Global Lead Arrangers or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any other Credit Document or any related agreement or any document furnished
hereunder or thereunder.
Except as otherwise provided in Section 11.02(b) with respect to
this Agreement, the Administrative Agent and/or the Collateral Agent (as the
case may be) may, with the prior consent of the Required Lenders (but not
otherwise), consent to any modification, supplement or waiver under any of the
Credit Documents or grant any consent thereunder, provided that, without the
prior consent of each Lender, the Administrative Agent and/or Collateral Agent
(as the case may be) shall not (except as provided herein or in the Security
Documents) (i) release all or any part of the Collateral or otherwise terminate
any Lien relating thereto under any Security Document providing for collateral
security, (ii) agree to additional obligations being secured by such Collateral
or alter the relative priorities of the obligations entitled to the benefits of
the Liens created under the Security Documents, (iii) release any Subsidiary
Guarantor under the Subsidiary Guarantee Agreement from its guarantee
obligations thereunder or (iv) without limiting any of the foregoing clauses,
agree to any modification or the termination or release of the Reserve Capital
Call Obligations or (from and after the issuance of the Motorola Guarantee
pursuant to Section 8.09(a)) the Motorola Guarantee (except for the termination
or release thereof in accordance with the terms thereof or as expressly provided
herein or in the Security Agreement), except that no such consent shall be
required, and the Administrative Agent or Collateral Agent (as the case may be)
is hereby authorized, to release any Lien covering property and/or to release
any such Subsidiary Guarantor that is the subject of either a disposition of
property permitted hereunder or a disposition to which the Required Lenders have
consented.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Notices. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other
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communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to the Company, to:
Iridium Operating LLC
1575 Eye Street, N.W.
Suite 800
Washington, D.C. 20005
Attention: General Counsel
(Telecopy No.: (202) 408-3761);
(b) if to the Administrative Agent, to:
The Chase Manhattan Bank
Loan and Agency Services Group
1 Chase Manhattan Plaza
8th Floor
New York, New York 10081
Attention: Winslowe Ogbourne
(Telecopy No.: (212) 552-5700);
with a copy to:
The Chase Manhattan Bank
270 Park Avenue
New York, New York 10017
Attention: Ronald Lepes/William Rottino
(Telecopy No.: (212) 270-2740/(212) 270-1724);
(c) if to a Lender, to it at its address (or telecopy number) set
forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
SECTION 11.02. Waivers; Amendments.
(a) No failure or delay by any Agent or any Lender in exercising
any right or power hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the Agents and the Lenders hereunder are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of
any provision of this Agreement or consent to any departure by any Credit Party
therefrom shall in any event
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91
be effective unless the same shall be permitted by paragraph (b) of this
Section, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. Without limiting the generality of
the foregoing, the making of a Loan shall not be construed as a waiver of any
Default, regardless of whether any Agent or any Lender may have had notice or
knowledge of such Default at the time.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Company and the Required Lenders or by the Company and the
Administrative Agent with the consent of the Required Lenders; provided that no
such agreement shall (i) increase the Commitment of any Lender without the
written consent of such Lender, (ii) reduce the principal amount of any Loan or
reduce the rate of interest thereon, or reduce any fees payable hereunder,
without the prior written consent of each Lender affected thereby, (iii)
postpone the scheduled date of payment (including any payment under Section
2.09) of the principal amount of any Loan, or any interest thereon, or any fees
payable hereunder, or reduce the amount of, waive or excuse any such payment, or
postpone the scheduled date of expiration of any Commitment, without the written
consent of each Lender affected thereby, (iv) change Section 2.16(b) or (c) in a
manner that would alter the pro rata sharing of payments required thereby,
without the written consent of each Lender, (v) change any of the provisions of
this Section or the definition of the term "Required Lenders" or any other
provision hereof specifying the number or percentage of Lenders required to
waive, amend or modify any rights hereunder or make any determination or grant
any consent hereunder, without the written consent of each Lender or (vi) waive
or modify Section 8.09; provided, further, that no such agreement shall amend,
modify or otherwise affect the rights or duties of any Agent hereunder or under
any other Credit Document without the prior written consent of such Agent.
SECTION 11.03. Expenses; Indemnity; Damage Waiver.
(a) The Company shall pay (i) all reasonable out-of-pocket
expenses incurred by the Global Lead Arrangers and the Agents, including the
reasonable fees, charges and disbursements of Milbank, Tweed, Hadley & McCloy,
special New York counsel to the Global Lead Arrangers and the Agents, in
connection with the syndication of the credit facilities provided for herein,
the preparation, negotiation, execution, delivery and administration of this
Agreement and the other Credit Documents or any amendments, modifications or
waivers of the provisions hereof or thereof (whether or not the transactions
contemplated hereby or thereby shall be consummated), (ii) all reasonable
out-of-pocket expenses incurred by any Agent or any Lender, including the fees,
charges and disbursements of such special New York counsel and/or any other
counsel selected by the Global Lead Arrangers, the Agents or the Required
Lenders, in connection with the enforcement or protection of its rights in
connection with this Agreement and the other Credit Documents, including its
rights under this Section, or in connection with the Loans made hereunder,
including in connection with any workout, restructuring or negotiations in
respect thereof, (iii) all reasonable out-of-pocket costs and expenses of the
Administrative Agent (including the fees, charges and disbursements of said
special New York counsel) incurred in connection with the negotiation,
preparation, execution and delivery of any waiver or amendment of, or supplement
or modification to, any of the Credit Documents, (iv) and all reasonable costs,
expenses, taxes, assessments and other charges incurred in connection with any
filing,
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registration, recording or perfection of any security interest contemplated by
any Security Document or any other document referred to therein and (v) all
transfer, stamp, documentary or other similar taxes, assessments or charges, if
any, upon any of the Credit Documents.
(b) The Company shall indemnify the Global Lead Arrangers, the
Agents and each Lender, and each Related Party of any of the foregoing Persons
(each such Person being called an "Indemnitee") against, and to hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and
related expenses, including the fees, charges and disbursements of any counsel
for any Indemnitee, incurred by or asserted against any Indemnitee arising out
of, in connection with, or as a result of (i) the execution or delivery of this
Agreement or any agreement or instrument contemplated hereby, the performance by
the parties hereto of their respective obligations hereunder or the consummation
of the transactions contemplated hereby, (ii) any Loan or the use of the
proceeds therefrom, (iii) any actual or alleged presence or Release of Hazardous
Materials on or from any property owned or operated by the Company or any of its
Subsidiaries, or any Environmental Claim related in any way to the Company or
any of its Subsidiaries, or (iv) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory and regardless of whether any Indemnitee is a
party thereto; provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or
related expenses are determined by a court of competent jurisdiction by final
and nonappealable judgment to have resulted from the gross negligence or willful
misconduct of such Indemnitee.
(c) To the extent that the Company fails to pay any amount
required to be paid by it to any Agent under paragraph (a) or (b) of this
Section, each Lender severally agrees to pay to such Agent such Lender's
Applicable Percentage (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount;
provided that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted
against such Agent in its capacity as such (except to the extent arising from
the gross negligence or willful misconduct of such Agent).
(d) To the extent permitted by applicable Government Rule, the
Company shall not assert, and hereby waives, any claim against any Indemnitee,
on any theory of liability, for special, indirect, consequential or punitive
damages (as opposed to direct or actual damages) arising out of, in connection
with, or as a result of, this Agreement or any agreement or instrument
contemplated hereby, any Loan or the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable promptly
after written demand therefor.
SECTION 11.04. Successors and Assigns.
(a) The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns permitted hereby, except that the Company may not assign or otherwise
transfer any of its rights or obligations hereunder without the prior written
consent of each Lender (and any attempted assignment or transfer by the Company
without such consent shall be null and void). Nothing in this Agreement,
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93
expressed or implied, shall be construed to confer upon any Person (other than
the parties hereto, their respective successors and assigns permitted hereby
and, to the extent expressly contemplated hereby, the Related Parties of each of
the Administrative Agent and the Lenders) any legal or equitable right, remedy
or claim under or by reason of this Agreement.
(b) Any Lender may assign to one or more assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans at the time owing to it); provided that
(i) except in the case of an assignment to a Lender or an affiliate of a Lender
or, in the case of a Lender that is an investment fund, to another investment
fund with the same investment advisor as such Lender, each of the Company and
the Administrative Agent must give their prior written consent to such
assignment (which consent shall not be unreasonably withheld), (ii) except in
the case of an assignment to a Lender or an Affiliate of a Lender or an
assignment of the entire remaining amount of the assigning Lender's Commitment,
the amount of the Commitment of the assigning Lender subject to each such
assignment shall not be less than $5,000,000 and, after giving effect to such
assignment, the assigning Lender's Commitment and Loans shall not be less than
$5,000,000, in each case determined as of the date the Assignment and Acceptance
with respect to such assignment is delivered to the Administrative Agent, unless
each of the Company and the Administrative Agent otherwise consent, (iii) each
partial assignment shall be made as an assignment of a proportionate part of all
the assigning Lender's rights and obligations under this Agreement, (iv) the
parties to each assignment shall execute and deliver to the Administrative Agent
an Assignment and Acceptance, together with a processing and recordation fee of
$3,500 for such assignment (except that in the case of contemporaneous
assignments to assignees that are investment funds with the same investment
advisor, such fee shall be payable with respect to one assignment only), and (v)
the assignee, if it shall not be a Lender, shall deliver to the Administrative
Agent an Administrative Questionnaire; provided, further, that any consent of
the Company otherwise required under this paragraph shall not be required if an
Event of Default under clause (j) of Section 9.01 has occurred and is
continuing. Upon acceptance and recording pursuant to paragraph (d) of this
Section, from and after the effective date specified in each Assignment and
Acceptance, the assignee thereunder shall be a party hereto and, to the extent
of the interest assigned by such Assignment and Acceptance, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Acceptance, be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all of the assigning Lender's
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of Sections 2.13,
2.14, 2.15 and 11.03). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this paragraph shall
be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (e) of
this Section.
(c) The Administrative Agent, acting for this purpose as an agent
of the Company, shall maintain at one of its offices in The City of New York a
copy of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Loans owing to, each Lender pursuant to the terms
hereof from time to time (the "Register"). The entries in the
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Register shall be conclusive, and the Company, the Administrative Agent and the
Lenders may treat each Person whose name is recorded in the Register pursuant to
the terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for
inspection by the Company and any Lender, at any reasonable time and from time
to time upon reasonable prior notice.
(d) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, the assignee's completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section and any written consent to such assignment required by paragraph
(b) of this Section, the Administrative Agent shall accept such Assignment and
Acceptance and record the information contained therein in the Register. No
assignment shall be effective for purposes of this Agreement unless it has been
recorded in the Register as provided in this paragraph.
(e) Any Lender may, without the consent of the Company or the
Administrative Agent, sell participations to one or more banks or other entities
(a "Participant") in all or a portion of such Lender's rights and obligations
under this Agreement and the other Credit Documents (including all or a portion
of its Commitment and the Loans owing to it); provided that (i) such Lender's
obligations under this Agreement and the other Credit Documents shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) the Company, the
Administrative Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Credit Documents. Any agreement
or instrument pursuant to which a Lender sells such a participation shall
provide that such Lender shall retain the sole right to enforce this Agreement
and the other Credit Documents and to approve any amendment, modification or
waiver of any provision of this Agreement or any other Credit Document; provided
that such agreement or instrument may provide that such Lender will not, without
the consent of the Participant, agree to any amendment, modification or waiver
described in the first proviso to Section 11.02(b) that affects such
Participant. The Company agrees that each Participant shall be entitled to the
benefits of Sections 2.13, 2.14 and 2.15 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to paragraph (b) of
this Section, provided that (i) a Participant shall not be entitled to receive
any greater payment under Section 2.13 or 2.15 than the applicable Lender would
have been entitled to receive with respect to the participation sold to such
Participant, unless the sale of the participation to such Participant is made
with the Company's prior written consent and (ii) a Participant that would be a
Foreign Lender if it were a Lender shall not be entitled to the benefits of
Section 2.15 unless the Company is notified of the participation sold to such
Participant and such Participant agrees, for the benefit of the Company, to
comply with Section 2.15(e) as though it were a Lender.
(f) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any such pledge or assignment to a Federal
Reserve Bank, and this Section shall not apply to any such pledge or assignment
of a security interest; provided that no such pledge or assignment of a
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security interest shall release a Lender from any of its obligations hereunder
or substitute any such assignee for such Lender as a party hereto.
(g) A Lender may furnish any information concerning the Company
(or any of its Subsidiaries and affiliates) or the Iridium Business in the
possession of such Lender from time to time to assignees and Participants
(including prospective assignees and Participants), subject, however, to the
provisions of Section 11.12(b).
(h) Anything in this Section to the contrary notwithstanding, no
Lender may assign or participate any interest in any Loan held by it hereunder
to the Company (or any of its Subsidiaries or affiliates) without the prior
consent of each Lender.
SECTION 11.05. Survival. All covenants, agreements,
representations and warranties made by the Company herein and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement shall be considered to have been relied upon by the other parties
hereto and shall survive the execution and delivery of this Agreement and the
making of any Loans, regardless of any investigation made by any such other
party or on its behalf and notwithstanding that the Administrative Agent or any
Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this
Agreement is outstanding and unpaid and so long as the Commitments have not
expired or terminated. The provisions of Sections 2.13, 2.14, 2.15, 3.03, 11.03
and 11.12(b) and Article X shall survive and remain in full force and effect
regardless of the consummation of the transactions contemplated hereby, the
repayment of the Loans, the expiration or termination of the Commitments or the
termination of this Agreement or any provision hereof.
SECTION 11.06. Counterparts; Effectiveness; Integration. This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. Except as provided
in Section 4.01, this Agreement shall become effective when the Administration
Agent shall have received counterparts hereof which, when taken together, bear
the signatures of each of the parties hereto, and thereafter shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Delivery of an executed counterpart of a signature page
of this Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement. This Agreement and any separate letter
agreements with respect to fees payable to the Global Lead Arrangers and/or the
Agents constitute the entire contract among the parties relating to the subject
matter hereof and supersede any and all previous agreements and understandings,
oral or written, relating to the subject matter hereof.
SECTION 11.07. Severability. Any provision of this Agreement held
to be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
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SECTION 11.08. Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lender is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by such Lender to or
for the credit or the account of any Credit Party against any of and all the
obligations of any Credit Party now or hereafter existing under this Agreement
held by such Lender, irrespective of whether or not such Lender shall have made
any demand under this Agreement and although such obligations may be unmatured.
The rights of each Lender under this Section are in addition to other rights and
remedies (including other rights of setoff) which such Lender may have.
SECTION 11.09. Governing Law; Jurisdiction; Consent to Service of
Process.
(a) This Agreement shall be construed in accordance with and
governed by the law of the State of New York.
(b) The Company hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of the Supreme
Court of the State of New York sitting in New York County and of the United
States District Court of the Southern District of New York, and any appellate
court from any thereof, in any action or proceeding arising out of or relating
to this Agreement or any other Credit Document to which it is a party, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York State or,
to the extent permitted by law, in such Federal court. Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement shall affect any
right that the Administrative Agent or any Lender may otherwise have to bring
any action or proceeding relating to this Agreement against the Company or its
properties in the courts of any jurisdiction.
(c) The Company hereby irrevocably appoints CT Corporation (the
"Process Agent") with an office on the date hereof at 1633 Broadway, New York,
New York 10019 as its agent to receive on behalf of it and its property service
of copies of the summons and complaint and any other process which may be served
in any such suit, action or proceeding. Such service may be made by mailing or
delivering a copy of such process to the Company, in care of the Process Agent
at the Process Agent's above address and the Company hereby irrevocably
authorizes and directs the Process Agent to receive such service on its behalf.
The Administrative Agent and each Lender agree to mail to the Company at its
address provided under Section 11.01 a copy of any summons, complaint, or other
process mailed or delivered by it to the Company in care of the Process Agent.
As an alternate method of service, the Company also irrevocably consents to the
service of any and all process in any such suit, action or proceeding by mailing
of copies of such process to it at its address provided under Section 11.01. All
mailings under this Section shall be by certified mail, return receipt
requested. Nothing in this Agreement will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.
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(d) The Company hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement in any court referred to
in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.
(e) To the extent that the Company may be or become entitled, in
any jurisdiction in which judicial proceedings may at any time be commenced with
respect to this Agreement or any other Credit Document, to claim for itself or
its property or revenues any immunity from suit, court jurisdiction, attachment
prior to judgment, attachment in aid of execution of a judgment, execution of a
judgment or from any other legal process or remedy relating to its obligations
under this Agreement or any other Credit Agreement and to the extent that in any
such jurisdiction there may be attributed such an immunity (whether or not
claimed), the Company hereby irrevocably agrees not to claim and hereby
irrevocably waives such immunity to the fullest extent permitted by the laws of
such jurisdiction.
SECTION 11.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 11.11. Headings. Article and Section headings and the
Table of Contents used herein are for convenience of reference only, are not
part of this Agreement and shall not affect the construction of, or be taken
into consideration in interpreting, this Agreement.
SECTION 11.12. Confidentiality.
(a) The Company acknowledges that from time to time financial
advisory, investment banking and other services may be offered or provided to
the Company or one or more of its Subsidiaries (in connection with this
Agreement or otherwise) by any Lender or by one or more subsidiaries or
affiliates of such Lender. The Company hereby agrees that, in the event any such
services are provided to the Company or any of its Subsidiaries, each Lender
providing such services is authorized to share any information delivered to such
Lender by the Company and its Subsidiaries pursuant to this Agreement, or in
connection with the decision of such Lender to enter into this Agreement, to any
such subsidiary or affiliate providing such services, provided that any such
subsidiary or affiliate receiving such information agrees to be bound by the
provisions of paragraph (b) of this Section as if it were a Lender hereunder.
Such authorization shall survive the repayment of the Loans and the termination
of the Commitments.
Senior Secured Credit Agreement
<PAGE> 103
98
(b) Each Lender, each Agent and each Global Lead Arranger agrees
(on behalf of itself and each of its affiliates, directors, officers, employees
and representatives) to restrict dissemination of any Confidential Information
(as defined below) only to those of its directors, officers, employees and
representatives who are involved in the evaluation of such information, and to
use reasonable precautions to keep such information confidential, in accordance
with its customary procedures for handling confidential information of the same
nature and in accordance with safe and sound banking practices. For purposes of
this Agreement, "Confidential Information" means any non-public information
supplied to it by the Company, including its contractors, consultants or
sponsors, pursuant to this Agreement or by Motorola in connection with this
Agreement or any Motorola Agreement, that is identified (in writing, in the case
of written information) by the Company or Motorola, as the case may be, as being
confidential at the time the same is delivered to the Lenders, the Agents or the
Global Lead Arrangers, provided that nothing herein shall limit the disclosure
of any such information by any Lender, Agent or Global Lead Arranger (i) after
such information shall have become public (other than through a violation of
this Section by such Lender, Agent or Global Lead Arranger), (ii) to the extent
required by statute, rule, regulation or judicial process, (iii) to counsel or
other experts for any of the Lenders, Agents or Global Lead Arrangers, provided
that such counsel or experts shall be bound by the requirements of this
paragraph (b) with respect to any such information, (iv) to bank examiners (or
any other regulatory authority having jurisdiction over any Lender, Agent or
Global Lead Arranger), or to auditors or accountants or rating agencies, (v) to
any Global Lead Arranger, any Agent or any other Lender (or to any of their
respective affiliates, provided that any such disclosure to any such affiliate
shall be made on a "need to know" basis only for use by such affiliates (and
each of its officers, directors and employees) solely in connection with the
transactions contemplated by this Agreement and each such affiliate (and each of
its officers, directors and employees) shall agree (for the benefit of the
Company and Motorola) to be bound to keep such information confidential on the
same terms as set forth in this Section), (vi) in connection with any litigation
to which any one or more of the Lenders, the Global Lead Arrangers or the Agents
is a party, or in connection with the enforcement of rights or remedies
hereunder or under any other Credit Document, provided that the party intending
to make such disclosure shall use reasonable efforts to cooperate with the
Company or with Motorola, as the case may be, to reasonably minimize the extent
of any such disclosure or to obtain confidential treatment of information to be
disclosed, (vii) to a subsidiary or affiliate of such Lender as provided in
paragraph (a) of this Section or (viii) to any assignee or participant (or
prospective assignee or participant) so long as such assignee or participant (or
prospective assignee or participant) first executes and delivers to the
respective Lender, the Company and Motorola a confidentiality agreement
containing provisions substantially the same as those in this Section; provided,
further, that in no event shall any Lender, Agent or Global Lead Arranger be
obligated or required to return any materials furnished by the Company or
Motorola hereunder or under the Motorola Consent, respectively, except to the
extent it has agreed to do so in writing in conjunction with the receipt of such
information. The obligations of any assignee that has executed a confidentiality
agreement as provided above shall be superseded by this Section on the date upon
which such assignee becomes a Lender hereunder pursuant to Section 11.04(b).
SECTION 11.13. No Third Party Beneficiaries. The agreement of the
Lenders to make the Loans to the Company on the terms and conditions set forth
herein are solely for the
Senior Secured Credit Agreement
<PAGE> 104
99
benefit of the Company, and no other Person (including, without limitation, any
other Credit Party or any contractor, subcontractor, supplier or materialman
furnishing supplies, goods or services to or for the benefit of the Iridium
Business) shall have any rights hereunder or, as against any Agent or any
Lender, under any other Transaction Document, or with respect to the Loans or
the proceeds thereof.
Senior Secured Credit Agreement
<PAGE> 105
100
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
IRIDIUM OPERATING LLC
By
---------------------------------
Name:
Title:
Senior Secured Credit Agreement
<PAGE> 106
101
LENDERS
THE CHASE MANHATTAN BANK
By
---------------------------------
Name:
Title:
Senior Secured Credit Agreement
<PAGE> 107
102
BARCLAYS BANK PLC
By
---------------------------------
Name:
Title:
Senior Secured Credit Agreement
<PAGE> 108
103
BANK OF TOKYO-MITSUBISHI TRUST COMPANY
By
------------------------------------
Name:
Title:
By
------------------------------------
Name:
Title:
Senior Secured Credit Agreement
<PAGE> 109
104
DRESDNER AG IN WIESBADEN
By
---------------------------------
Name:
Title:
By
---------------------------------
Name:
Title:
Senior Secured Credit Agreement
<PAGE> 110
105
ISTITUTO BANCARLO SAN PAOLO DI
TORINO ISTITUTO MOBILIARE ITALIANO
S.p.A. - NEW YORK BRANCH
By
---------------------------------
Name:
Title:
Senior Secured Credit Agreement
<PAGE> 111
106
MERRILL LYNCH CAPITAL CORPORATION
By
---------------------------------
Name:
Title:
Senior Secured Credit Agreement
<PAGE> 112
107
THE FIRST NATIONAL BANK OF CHICAGO
By
---------------------------------
Name:
Title:
Senior Secured Credit Agreement
<PAGE> 113
108
WAYLAND INVESTMENT FUND, LLC
By
---------------------------------
Name:
Title:
Senior Secured Credit Agreement
<PAGE> 114
109
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By
---------------------------------
Name:
Title:
Senior Secured Credit Agreement
<PAGE> 115
110
THE BANK OF NEW YORK
By
---------------------------------
Name:
Title:
Senior Secured Credit Agreement
<PAGE> 116
111
CITIBANK, N.A.
By
---------------------------------
Name:
Title:
Senior Secured Credit Agreement
<PAGE> 117
112
DEUTSCHE BANK AG, NEW YORK BRANCH
AND/OR CAYMAN ISLANDS BRANCHES
By
---------------------------------
Name:
Title:
By
---------------------------------
Name:
Title:
Senior Secured Credit Agreement
<PAGE> 118
113
THE BANK OF NOVA SCOTIA
By
---------------------------------
Name:
Title:
Senior Secured Credit Agreement
<PAGE> 119
114
MERRILL LYNCH SENIOR FLOATING RATE
FUND, INC.
By
---------------------------------
Name:
Title:
Senior Secured Credit Agreement
<PAGE> 120
115
BAYERISCHE LANDESBANK
GIROZENTRALE
By
---------------------------------
Name:
Title:
By
---------------------------------
Name:
Title:
Senior Secured Credit Agreement
<PAGE> 121
116
GOLDMAN SACHS CREDIT PARTNERS, L.P.
By
---------------------------------
Name:
Title:
Senior Secured Credit Agreement
<PAGE> 122
117
THE SANWA BANK LIMITED
By
---------------------------------
Name:
Title:
Senior Secured Credit Agreement
<PAGE> 123
118
GRUPPO BANCA NAZIONALE DEL
LAVORO
BANCA NAZIONALE DEL LAVORO, S.p.A.
NEW YORK BRANCH
as Lender
By
---------------------------------
Name:
Title:
By
---------------------------------
Name:
Title:
GRUPPO BANCA NAZIONALE DEL
LAVORO
EFIBANCA, S.p.A. - ROMA
as Lender
By
---------------------------------
Name:
Title:
By
---------------------------------
Name:
Title:
Senior Secured Credit Agreement
<PAGE> 124
119
ROYAL BANK OF SCOTLAND PLC
By
---------------------------------
Name:
Title:
Senior Secured Credit Agreement
<PAGE> 125
120
CPR (USA) INC.
By
---------------------------------
Name:
Title:
Senior Secured Credit Agreement
<PAGE> 126
121
FRANKLIN FLOATING RATE TRUST
By
---------------------------------
Name:
Title:
Senior Secured Credit Agreement
<PAGE> 127
122
VAN KAMPEN SENIOR INCOME TRUST
By
---------------------------------
Name:
Title:
VAN KAMPEN PRIME RATE INCOME TRUST
By
---------------------------------
Name:
Title:
Senior Secured Credit Agreement
<PAGE> 128
123
GLOBAL LEAD ARRANGERS
CHASE SECURITIES INC.,
as a Global Lead Arranger
By
---------------------------------
Name:
Title:
BARCLAYS BANK PLC,
as a Global Lead Arranger
By
---------------------------------
Name:
Title:
Senior Secured Credit Agreement
<PAGE> 129
124
ADMINISTRATIVE AGENT
THE CHASE MANHATTAN BANK
By
---------------------------------
Name:
Title:
DOCUMENTATION AGENT
BARCLAYS BANK PLC
By
---------------------------------
Name:
Title:
Senior Secured Credit Agreement
<PAGE> 130
SCHEDULE I
Commitments
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
Lenders Commitments
------- -----------
- ---------------------------------------------------------------------------
<S> <C>
THE CHASE MANHATTAN BANK
- ---------------------------------------------------------------------------
BARCLAYS BANK PLC
- ---------------------------------------------------------------------------
BANK OF TOKYO-MITSUBISHI TRUST COMPANY
- ---------------------------------------------------------------------------
DRESDNER AG IN WIESBADEN
- ---------------------------------------------------------------------------
ISTITUTO BANCARLO SAN PAOLO DI TORINO ISTITUTO
MOBILIARE ITALIANO S.p.A. - NEW YORK BRANCH
- ---------------------------------------------------------------------------
MERRILL LYNCH CAPITAL CORPORATION
- ---------------------------------------------------------------------------
THE FIRST NATIONAL BANK OF CHICAGO
- ---------------------------------------------------------------------------
WAYLAND INVESMENT FUND, LLC
- ---------------------------------------------------------------------------
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
- ---------------------------------------------------------------------------
THE BANK OF NEW YORK
- ---------------------------------------------------------------------------
CITIBANK, N.A.
- ---------------------------------------------------------------------------
DEUTSCHE BANK AG, NEW YORK BRANCH AND/OR CAYMAN
ISLANDS BRANCHES
- ---------------------------------------------------------------------------
THE BANK OF NOVA SCOTIA
- ---------------------------------------------------------------------------
MERRILL LYNCH SENIOR FLOATING RATE FUND, INC.
- ---------------------------------------------------------------------------
BAYERISCHE LANDESBANK GIROZENTRALE
- ---------------------------------------------------------------------------
GOLDMAN SACHS CREDIT PARTNERS, L.P.
- ---------------------------------------------------------------------------
THE SANWA BANK LIMITED
- ---------------------------------------------------------------------------
BANCO NAZIONALE DEL LAVORO, S.p.A NEW YORK BRANCH
- ---------------------------------------------------------------------------
EFIBANCA, S.p.A. - ROMA
- ---------------------------------------------------------------------------
ROYAL BANK OF SCOTLAND PLC
- ---------------------------------------------------------------------------
CPR (USA) INC.
- ---------------------------------------------------------------------------
FRANKLIN FLOATING RATE TRUST
- ---------------------------------------------------------------------------
VAN KAMPEN SENIOR INCOME TRUST
- ---------------------------------------------------------------------------
VAN KAMPEN PRIME RATE INCOME TRUST
- ---------------------------------------------------------------------------
</TABLE>
Schedule I - Commitments
<PAGE> 131
SCHEDULE II
Real Property
[See Section 3.08]
Iridium Operating LLC currently owns no real property; but expects
to acquire the following property interests from Motorola, Inc. or an affiliate
of Motorola, Inc. by March 31, 1999.
1. TTAC (Oahu, Hawaii) - Leasehold interest; estimated value of buildings
and machinery/equipment is $12 million.
2. TTAC (Yellowknife, Northwest Territories, Canada) - Leasehold interest;
estimated value of buildings and machinery/equipment is $11 million.
3. TTAC (Iqaluit, Northwest Territories, Canada) - Leasehold interest;
estimated value of buildings and machinery/equipment is $10 million.
4. Satellite and Network Operations Center (Lansdowne, VA) - Real property
interest; estimated value of buildings and machinery/equipment is $21
million.
5. Backup Control Facility (Rome, Italy) - Leasehold interest; estimated
value of buildings and machinery/equipment is $20 million.
Schedule II - Real Property
<PAGE> 132
SCHEDULE III
Litigation
[See Section 3.09]
None
Schedule III - Litigation
<PAGE> 133
SCHEDULE IV
Environmental Matters
[See Section 3.11]
None
Schedule IV - Environmental Matters
<PAGE> 134
SCHEDULE V
Indebtedness
[See Section 3.17]
<TABLE>
<CAPTION>
Principal Amount Principal Amount
Title of Agreement Outstanding Outstanding
<S> <C> <C>
1. Indenture, dated as of July 16, 1997, $300 million $300 million
relating to the Company's and Capital's
13% Senior Notes due 2005, Series A
(Guaranteed by certain Subsidiaries),
and the Notes thereunder
2. Indenture, dated as of July 16, 1997, $500 million $500 million
relating to the Company's and Capital's
14% Senior Notes due 2005, Series B
(Guaranteed by certain Subsidiaries),
and the Notes thereunder
3. Indenture, dated as of October 17, 1997, $300 million $300 million
relating to the Company's and Capital's
11 1/4% Senior Notes due 2005, Series C
(Guaranteed by certain Subsidiaries),
and the Notes thereunder
4. 14 1/2% Senior Subordinated Discount Approx. $272 million $480.2 million (fully
Notes Due 2006 (accreted value) accreted value)
5. Indenture, dated as of May 13, 1998, $350 million $350 million
relating to the Company's and Capital's
10 7/8% Senior Notes due 2005, Series D
(Guaranteed by certain Subsidiaries),
and the Notes thereunder
6. Credit Agreement, dated as of August 21, $271.5 million $285 million
1996, amended, relating to the $275 million
Motorola Guaranteed Credit Facility, and
the Notes thereunder
7. Existing Secured Credit Agreement, and $550 million $1 Billion
the Credit Documents referred to therein
</TABLE>
Schedule V - Indebtedness
<PAGE> 135
<TABLE>
<CAPTION>
<S> <C> <C>
8. MOU Agreements Unspecified Unspecified
9. Motorola Guaranteed Credit Agreement $0 (exclusive of any $750,000,000
borrowing concurrently
with a borrowing under
this Agreement)
10. This Agreement and the other Credit Documents $0 $800,000,000
(other than the Motorola Agreements)
11. Principal Project Documents Unspecified Unspecified
</TABLE>
Schedule V - Indebtedness
<PAGE> 136
SCHEDULE VI
Liens
[See Section 3.18]
Liens granted pursuant to the Existing Secured Credit Agreement and the Security
Documents referred to therein. Outstanding principal amount $550 million.
Schedule VI - Liens
<PAGE> 137
SCHEDULE VII
Subsidiaries
[See Section 3.20]
<TABLE>
<CAPTION>
Name of Jurisdiction of Holder of Equity Nature of Equity Percentage
Subsidiary Incorporation Interests Interests Ownership
<S> <C> <C> <C> <C>
Iridium Capital Delaware Iridium Common 100%
Corporation Operating LLC Stock
Iridium IP LLC Delaware Iridium Membership 100%
Operating LLC Interests
Iridium Delaware Iridium Membership 100%
Roaming LLC Operating LLC Interests
Iridium Delaware Iridium Common 100%
Facilities Operating LLC Stock
Corporation
Iridium New Brunswick, Iridium Common 100%
Canada Canada Operating LLC Stock
Facilities Inc.
</TABLE>
Schedule VII - Subsidiaries
<PAGE> 138
SCHEDULE VIII
Investments
[See Section 3.21]
Promissory Note due from P.T. Bakrie to the Company (as transferee of
Iridium LLC) for approximately $7.5 million to secure payment for borrowings in
connection with the purchase of Class 1 Interests in Iridium LLC.
Promissory Note due from Iridium SudAmerica Corp. to the Company for
approximately $467,000 to secure payment for borrowings in connection with the
installation of software and upgrades to the Iridium SudAmerica Gateway.
Schedule VIII - Investments
<PAGE> 139
SCHEDULE IX
Restrictive Agreements
[See Section 7.09]
Existing Secured Credit Agreement and the other Credit Documents referred to
therein
Schedule IX - Restrictive Agreements
<PAGE> 140
SCHEDULE X
Employee Matters
[See Section 3.26]
None
Schedule X - Employee Matters
<PAGE> 141
SCHEDULE XI
Affiliate Agreements
[See Section 7.08]
Not Applicable
Schedule XI - Affiliate Agreements
<PAGE> 142
APPENDIX 1
CONDITIONS PRECEDENT
I. EXECUTION AND DELIVERY OF CREDIT AGREEMENT, NOTES AND GUARANTEE
1. Credit Agreement. This Agreement, duly executed and delivered by
each of the Company, the Agents, the Lenders, and Global Lead
Arrangers and this Agreement shall have become effective pursuant
to Section 11.06.
2. Promissory Notes. If requested by any Lender, the promissory note
or promissory notes for such Lender each duly executed and
delivered by the Company.
3. Subsidiary Guarantee Agreement. The Subsidiary Guarantee
Agreement, duly executed and delivered by each Subsidiary
Guarantor and the Administrative Agent.
II. EXECUTION AND DELIVERY OF SECURITY DOCUMENTS (AND RELATED DOCUMENTS)
1. Security Agreement. The Security Agreement, duly executed and
delivered by the Company, the Subsidiary Guarantors and the
Collateral Agent.
2. Depositary Agreement. The Depositary Agreement, duly executed and
delivered by the Company, the Collateral Agent and the Depositary
Bank specified therein, with respect to establishment, maintenance
and operation of the accounts of the Company contemplated to be
maintained with the Collateral Agent.
3. Parent Security Agreement. The Parent Security Agreement, duly
executed and delivered by Iridium LLC and the Collateral Agent.
4. Mortgages and Similar Instruments. A fee or leasehold mortgage,
deed of trust or similar instrument with respect to each parcel of
material real property or leasehold interest located in the United
States of the Company or any of its Subsidiaries owned or leased
as of the Closing Date, in each case duly executed and delivered
by the Company or the relevant Subsidiary, as the case may be.
5. LLC and Stock Certificates. Certificates evidencing the LLC
membership interests or capital stock, as applicable, of the
Company and each of its Subsidiaries, together with in each case
an undated stock or transfer power executed in blank, delivered
pursuant to the respective Security Document.
6. Filings, Registrations and Recordings. Evidence that all filings
(including applicable UCC financing statements), recordings,
registrations and similar action under each Security Document to
which Iridium LLC, the Company or any of its
Appendix 1 - Conditions Precedent
<PAGE> 143
2
Subsidiaries is a party as of the Closing Date have been duly made
in order to create a first priority security interest in the
Collateral covered thereby (except as may be provided therein and
subject to any Permitted Liens) and that the payment of all
filing, recordation, registration and similar fees and all taxes
and other similar charges in connection therewith and with the
execution and delivery of each such Security Document has been
made, or that arrangements satisfactory to the Collateral Agent
with respect to the foregoing have been made.
7. UCC Searches. Satisfactory results of UCC, tax and judgment lien
searches in each jurisdiction reasonably requested by the
Administrative Agent and under the names of Iridium LLC, the
Company and each of the Company's Subsidiaries and each other name
reasonably requested by the Administrative Agent.
8. Title Insurance, Etc. With respect to each mortgage or other
instrument referred to above creating a lien on any real property
interest as of the Closing Date, a mortgagee title insurance
policy in respect of each such property, together with all other
pertinent related documentation of the type referred to in Section
6.10(c)(i) as reasonably requested by the Administrative Agent.
III. EXECUTION AND DELIVERY OF MOTOROLA AGREEMENTS
1. Memorandum of Understanding. The Memorandum of Understanding, duly
executed and delivered by the Company and Motorola.
2. The Amended and Restated Agreement Regarding Guarantee. The
Amended and Restated Agreement Regarding Guarantee, duly executed
and delivered by the Company and Motorola.
3. Motorola Consent. The Motorola Consent, duly executed and
delivered by Motorola, the Company, the Administrative Agent and
the Collateral Agent.
4. Motorola Pledge Agreement. The Motorola Pledge Agreement, duly
executed and delivered by Motorola and the Collateral Agent, and
delivery of the stock certificate(s) evidencing the capital stock
of Space System License, Inc. pledged thereunder, together with an
undated stock power executed in blank.
5. FCC License. A certified copy of the FCC License.
IV. CLOSING CERTIFICATES AND OTHER DOCUMENTS AND INFORMATION TO BE DELIVERED
BY THE COMPANY AND/OR THE SUBSIDIARY GUARANTORS
1. Borrowing Request. A Borrowing Request with respect to the Loans
to be made on the Closing Date.
2. Company's Secretary's Certificate. A certificate of the Secretary
or an Assistant Secretary of the Company, dated the Closing Date,
as to: (i) the Company's
Appendix 1 - Conditions Precedent
<PAGE> 144
3
LLC Agreement; (ii) resolutions relating to the execution,
delivery and performance by the Company of the Credit Documents to
which it is a party; and (iii) incumbency and specimen signatures
of each officer of the Company executing any such Credit Documents
(and the Agents and each Lender may conclusively rely on such
officer's certificate until it receives notice in writing from the
Company).
3. Secretary's Certificate of each Subsidiary Guarantor. A
certificate of the Secretary or an Assistant Secretary of each
Subsidiary Guarantor, dated the Closing Date, as to: (i) its
limited liability company agreement, charter, by-laws or other
organizational documents; (ii) resolutions relating to the
execution, delivery and performance by such Subsidiary Guarantor
of the Credit Documents to which it is a party; and (iii)
incumbency and specimen signature of each officer of such
Subsidiary Guarantor executing any such Credit Documents (and the
Agents and each Lender may conclusively rely on such officer's
certificate until it receives notice in writing from such
Subsidiary Guarantor).
4. Company's Senior Officer's Certificate. A certificate of a senior
officer of the Company, dated the Closing Date, as to:
(i) the accuracy of the representations and warranties made
by the Company and its Subsidiaries in the Credit Documents to
which any of them is a party;
(ii) to the best knowledge of the Company, the accuracy of
the representations and warranties made by each other Transaction
Party in each Credit Document to which it is a party (other than
the Agents, the Global Lead Arrangers and the Lenders);
(iii) the absence of any Default; and
(iv) the insurance obtained by the Company being in
accordance with the insurance requirements under Section 8.01, and
that such insurance is in full force and effect and all insurance
premiums and deposits then due and payable thereon have been paid
or made.
5. Insurance. Certificates of insurance from Iridium LLC's and the
Company's insurance brokers showing that (i) the Agents and the
Lenders are additional insureds under all liability insurance
policies of Iridium LLC and the Company and (ii) The Chase
Manhattan Bank, as Collateral Agent, is named as loss payee under
all casualty insurance policies of Iridium LLC and the Company and
(if requested by the Administrative Agent) true and complete copy
of the insurance policies required to be in effect as of the
Closing Date.
6. Financial Statements. Copies of the most recent audited
consolidated financial statements of the Company and unaudited
quarterly consolidated financial
Appendix 1 - Conditions Precedent
<PAGE> 145
4
statements of the Company for each quarterly period ended
subsequent to such audited financial statements.
7. FCC License. A certified copy of the FCC License issued to a
wholly-owned subsidiary of the Company (but only to the extent
such license shall have been transferred to the Company prior to
the Closing Date).
8. Process Agent. Letter from one or more persons satisfactory to the
Administrative Agent accepting its appointment as process agent in
New York for the Company and its Subsidiaries under the Credit
Documents to each of the Company or any of the Subsidiary
Guarantors is a party.
9. Budget. The budget duly adopted by the board of directors of the
Company covering the first quarter of 1999.
V. CLOSING CERTIFICATES AND OTHER DOCUMENTS AND INFORMATION TO BE DELIVERED
BY IRIDIUM LLC
1. Iridium LLC's Secretary's Certificate. A certificate of the
Secretary or an Assistant Secretary of Iridium LLC, dated the
Closing Date, as to: (i) the Limited Liability Company Agreement
of Iridium LLC as amended and in effect on the Closing Date
(including an amendment thereto pursuant to which the members of
Iridium LLC have consented to the assignment of the rights in
favor of Iridium LLC with respect to their respective Reserve
Capital Call Obligations pursuant to the Parent Security
Agreement, (ii) resolutions relating to the execution, delivery
and performance by Iridium LLC of the Credit Documents to which it
is a party), and (iii) incumbency and specimen signatures of each
officer of Iridium LLC executing any such Credit Documents (and
the Agents and each Lender may conclusively rely on such officer's
certificate until it receives notice in writing from Iridium LLC).
2. Iridium LLC's Senior Officer's Certificate. A certificate of a
senior officer of Iridium LLC, dated the Closing Date, as to:
(i) the accuracy of the representations and warranties made
by Iridium LLC in each Credit Document to which it is a party; and
(ii) the absence of any Default relating to Iridium LLC.
3. Financial Statements. Copies of the most recent audited
consolidated financial statements of Iridium LLC and unaudited
quarterly consolidated financial statements of Iridium LLC for
each quarterly period ended subsequent to such audited financial
statements.
Appendix 1 - Conditions Precedent
<PAGE> 146
5
4. Process Agent. Letter from one or more persons satisfactory to the
Administrative Agent accepting its appointment as process agent in
New York for Iridium LLC under the Credit Documents to which
Iridium LLC is a party.
VI. CLOSING CERTIFICATES AND OTHER DOCUMENTS AND INFORMATION TO BE DELIVERED
BY MOTOROLA
1. Insurance. Evidence that the Lenders and the Agents shall be
additional insureds under the liability insurance policy of
Motorola and its Subsidiaries specifically procured in connection
with the Iridium Business.
2. Financial Statements of Motorola. Copies of the most recent annual
audited consolidated and unaudited quarterly financial statements
of Motorola.
3. Secretary's Certificate. An officer's certificate of the Secretary
or an Assistant Secretary of Motorola, dated the Closing Date, as
to: (i) the charter and by-laws of Motorola; (ii) the resolutions
relating to the execution, delivery and performance by Motorola of
the Credit Documents to which it is a party; and (iii) the
incumbency and specimen signatures of each officer of Motorola
executing any such Credit Document (and the Agents and each Lender
may conclusively rely on such officer's certificate until it
receives notice in writing from Motorola).
4. Senior Officer's Certificate. A certificate of a senior officer of
Motorola certifying as to: (i) the accuracy of the representations
and warranties made by Motorola in the Credit Documents to which
Motorola is party; and (ii) the absence of any Default relating to
Motorola thereunder.
5. Opinions of Counsel. The opinions of counsel to Motorola referred
to below.
VII. DOCUMENTS FROM OTHER PARTIES
1. Assignment Consents. A consent to the assignment by the Company of
its rights in certain of the material agreements to which the
Company is a party pursuant to the Security Agreement, executed by
each the relevant counterparty thereto (other than Iridium LLC,
the Company and its Subsidiaries, Motorola and the Secured
Parties).
2. Certain Other Parties' Financial Statements. Copies of the audited
financial statements of each person (if available, otherwise
unaudited and certified by a senior financial officer of such
party) obligated in respect of the Reserve Capital Call
Obligations, for the two most recent fiscal years and unaudited
quarterly financial statements of such party for each quarterly
period ended subsequent to the date of such audited financial
statements, but only to the extent that the Company, using
reasonable efforts has been able to obtain the same.
Appendix 1 - Conditions Precedent
<PAGE> 147
6
3. Other Documents. Receipt of such other documents, certificates,
instruments and information as the Administrative Agent or special
counsel to the Global Lead Arrangers may reasonably request.
VIII. LEGAL OPINIONS
1. Opinion(s) of Counsel. Opinion(s) of Counsel to Iridium LLC, the
Company and the Company's Subsidiaries in the form and substance
reasonably satisfactory to the Administrative Agent.
2. Opinion of Counsel to Motorola. Opinions of New York and in-house
counsel to Motorola in the form and substance reasonably
satisfactory to the Administrative Agent.
3. Opinion of Milbank, Tweed, Hadley & McCloy. An opinion of Milbank,
Tweed, Hadley & McCloy, special New York counsel to the Global
Lead Arrangers and the Agents.
4. Other Opinions. If any mortgage or similar instrument is being
executed and delivered as of the Closing Date, an opinion of
counsel to the Company or the relevant Subsidiary of the Company
in the jurisdiction where the property subject thereto is located
in form and substance reasonably satisfactory to the
Administrative Agent.
IX. TECHNICAL CONDITION
1. Report. A copy of the letter from the independent technical
advisor to the Global Lead Arrangers dated December 17, 1998
delivered to the Lenders.
X. ADDITIONAL CONDITIONS
1. Payment of Fees and Expenses. Evidence that the Company shall have
paid such fees, expenses and other amounts as the Company shall
have agreed to pay to the Global Lead Arrangers, the Agents and/or
the Lenders on or prior to the Closing Date, including, without
limitation, the reasonable fees, charges and disbursements of
Milbank, Tweed, Hadley & McCloy, special New York counsel to the
Global Lead Arrangers and the Agents, and of each of the Lenders'
consultants (to the extent that statements for such fees and other
amounts have been delivered to the Company).
2. Motorola Guaranteed Credit Agreement. Evidence that the Company,
the lenders party thereto and Motorola shall have executed and
delivered the Motorola Guaranteed Credit Agreement, and that not
less than $470,000,000 of loans thereunder shall have been made to
the Company on the Closing Date.
Appendix 1 - Conditions Precedent
<PAGE> 148
7
3. Payment of Outstanding Amounts under the Existing Credit
Agreements. Evidence that the outstanding amounts under the
Existing Guaranteed Credit Agreement and the Existing Secured
Credit Agreement have been paid in full and the commitments
thereunder have terminated, and all security interests and liens
securing the amounts under the Existing Secured Credit Agreement
have been released, or arrangements satisfactory to the
Administrative Agent shall have been made for such payment,
termination and/or release.
XI. STATUS OF MATERIAL IRIDIUM AGREEMENTS
1. Space System Contract. A certified copy of the Space System
Contract as amended and in effect on the Closing Date.
2. Terrestrial Network Development Contract. A certified copy of the
Terrestrial Network Development Contract as amended and in effect
on the Closing Date.
3. O&M Contract. A certified copy of the O&M Contract as amended and
in effect on the Closing Date.
4. Gateway Authorization Agreements. Certified copies of each Gateway
Authorization Agreement as amended and in effect on the Closing
Date.
5. IBSS Agreement. A certified copy of the IBSS Agreement as amended
and in effect on the Closing Date.
6. Management Services Agreement. A certified copy of the Management
Services Agreement among Iridium World Communications Ltd.,
Iridium LLC and the Company as amended and in effect on the
Closing Date.
Appendix 1 - Conditions Precedent
<PAGE> 149
APPENDIX 2
Insurance Program
[See Section 8.01]
(The Insurance Policies Maintained by Iridium Operating LLC and
listed on this Appendix 2 are presented as representative of the types of
insurance to be maintained under Section 8.01. Underwriters, Policy/Binder
Numbers, etc. may change from time to time)
1. Satellite In-Orbit Liability Insurance - Principal Underwriter(s):
Lloyd's of London; Policy/Binder Number(s): 893/AG982039; Coverage:
combined single limit coverage of five hundred million dollars (US$
500,000,000).
2. Satellite In-Orbit Life Insurance - Debris Coverage
(a) Primary Layer: Principal Underwriter(s): Lloyd's of London;
Policy/Binder Number(s): 393/AG962064; Coverage: maximum amount payable
under the policy is two hundred seventy six million dollars (US$
276,000,000).
(b) First Excess Layer: Principal Underwriter(s): Lloyd's of London;
Policy/Binder Number(s): 393/AG972125; Coverage: losses between two
hundred seventy six million dollars (US$ 276,000,000) and five hundred
fifty two million dollars (US$ 552,000,000).
(c) 2nd Excess Layer: Principal Underwriter(s): Lloyd's of London;
Policy/Binder Number(s): 393/AG972131; Coverage: losses between five
hundred fifty two million dollars (US$ 552,000,000) and seven hundred
fifty nine million dollars (US$ 759,000,000).
3. Directors and Officers Insurance - Principal Underwriter(s): AIG, Old
Republic, Zurich, Reliance and Chubb; Policy/Binder Number(s): 8565444,
CUG25197, DOC2720013-01, NDA012368Z-98A; Coverage: $60 Million, expiring
7/18/01.
4. General Liability Insurance - Principal Underwriter(s): Chubb Group;
Policy/Binder Number(s): 35316012; Coverage: $1 Million, expiring
7/18/99.
5. Property Insurance - Principal Underwriter(s): Chubb Group; Policy/Binder
Number(s): 35316012; Coverage: Replacement cost, expiring 7/18/99.
6. Automobile Liability Insurance - Principal Underwriter(s): Chubb Group;
Policy/Binder Number(s): 73198771 and 73213708; Coverage: $1 million,
expiring 7/18/99.
7. Workers' Compensation and Employers Liability Insurance - Principal
Underwriter(s): Chubb Group; Policy/Binder Number(s): 71623596; Coverage:
Statutory, expiring 7/18/99.
Appendix 2 - Insurance Program
<PAGE> 150
8. Aircraft Liability & Physical Damage Insurance - Principal
Underwriter(s): United States Aviation Insurance Group; Policy/Binder
Number(s): SIHL1-8000; Coverage: $21,966,817 on the Hull and $200 million
liability limit, expiring 3/11/99.
9. Umbrella Liability - Principal Underwriter(s): Chubb Group; Policy/Binder
Number(s): (98)7970-42-53RMG; Coverage: $50 million excess of underlying,
expiring 7/18/99.
10. Employment Practices Liability - Principal Underwriter(s): National
Union; Policy/Binder Number(s): 7704648; Coverage: $10 million, expiring
12/31/98.
11. Fiduciary Liability - Principal Underwriter(s): Chubb Group;
Policy/Binder Number(s): 81515828; Coverage: 5,000,000, expiring 7/29/99.
12. Crime and Excess Crime - Principal Underwriter(s): National Union and
Chubb; Policy/Binder Number(s): 4860134 and 81456518; Coverage:
$20,000,000, expiring 7/29/99.
Appendix 2 - Insurance Program
<PAGE> 151
EXHIBIT A
[FORM OF ASSIGNMENT AND ACCEPTANCE]
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Senior Secured Credit Agreement dated as
of December 23, 1998 (as amended, supplemented or otherwise modified and in
effect on date hereof, the "Credit Agreement") among Iridium Operating LLC, a
Delaware limited liability company, the lenders named therein, the Global Lead
Arrangers named therein, The Chase Manhattan Bank, as administrative agent for
such lenders and/or collateral agent, and Barclays Bank PLC, as documentation
agent thereunder. Terms defined in the Credit Agreement are used herein with the
same meanings.
The Assignor named below hereby sells and assigns, without
recourse, to the Assignee named below, and the Assignee hereby purchases
and assumes, without recourse, from the Assignor, effective as of the Assignment
Date set forth below, the interests set forth below (the "Assigned Interest") in
the Assignor's rights and obligations under the Credit Agreement, including,
without limitation, the interests set forth below in the Commitment of the
Assignor on the Assignment Date and Loans owing to the Assignor which are
outstanding on the Assignment Date, together with unpaid interest accrued on the
assigned Loans to the Assignment Date, and the amount, if any, set forth below
of the fees accrued to the Assignment Date for the account of the Assignor. The
Assignee hereby acknowledges receipt of a copy of the Credit Agreement. From and
after the Assignment Date (i) the Assignee shall be a party to and be bound by
the provisions of the Credit Agreement and, to the extent of the interests
assigned by this Assignment and Acceptance, have the rights and obligations of a
Lender thereunder and (ii) the Assignor shall, to the extent of the interests
assigned by this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement.
The Assignor (a) makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement, any other Credit Document or any instrument or document furnished
pursuant thereto, other than that it has not created any adverse claim upon the
interest being assigned by it hereunder and that such interest is free and clear
of any adverse claim; and (b) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Company, any of
its Subsidiaries or any other Transaction Party or the performance or observance
by the Company, any of its Subsidiaries or any other Transaction Party of any of
their respective obligations under the Credit Agreement or any other Transaction
Document or any other instrument or document furnished pursuant hereto or
thereto.
The Assignee (a) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance; (b) confirms that it
has received such documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this Assignment and
Acceptance; (c) agrees that it will, independently and without reliance upon the
Assignor, the Agents or any other person that has become a Lender and based on
such
Assignment and Acceptance
<PAGE> 152
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documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Agreement; and (d) appoints and authorizes (i) the Administrative Agent to take
such action as agent on its behalf and to exercise such powers under the Credit
Agreement and the other Credit Documents to which it is a party as are delegated
to the Administrative Agent by the terms thereof and (ii) the Collateral Agent
to take such action as agent on its behalf and to exercise such powers under the
Credit Documents to which it is a party as are delegated to the Collateral Agent
by the terms thereof, together, in each case, with such powers as are incidental
thereto.
This Assignment and Acceptance is being delivered to the
Administrative Agent together with (i) if the Assignee is a Foreign Lender, any
documentation required to be delivered by the Assignee pursuant to Section
2.15(e) of the Credit Agreement, duly completed and executed by the Assignee,
and (ii) if the Assignee is not already a Lender under the Credit Agreement, an
administrative questionnaire in the form supplied by the Administrative Agent,
duly completed by the Assignee. The [Assignee/Assignor] shall pay the fee
payable to the Administrative Agent pursuant to Section 11.04(b) of the Credit
Agreement.
This Assignment and Acceptance shall be governed by and construed
in accordance with the laws of the State of New York.
Assignment and Acceptance
<PAGE> 153
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Date of Assignment:
Legal Name of Assignor:
Legal Name of Assignee:
Assignee's Address for Notices:
Effective Date of Assignment
("Assignment Date"):
Percentage Assigned of
Facility/Commitment
(set forth, to at least
8 decimals, as a
percentage of the
Facility and the
aggregate Commitments
Principal Amount of all Lenders
Facility Assigned thereunder
- -------- -------- ----------------
Commitment Assigned: $ %
Loans:
Fees Assigned (if any):
The terms set forth above are hereby agreed to as of [_____________]:
[NAME OF ASSIGNOR], as Assignor
By
-----------------------------
Name:
Title:
[NAME OF ASSIGNEE], as Assignee
By
------------------------------
Name:
Title:
Assignment and Acceptance
<PAGE> 154
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The undersigned hereby consent to the within assignment:(1)
IRIDIUM OPERATING LLC
By
-------------------------
Name:
Title:
THE CHASE MANHATTAN BANK,
as Administrative Agent
By
-------------------------
Name:
Title:
- ------------------------
(1) Consents to be included to the extent required by Section 11.04(b) of the
Credit Agreement.
Assignment and Acceptance
<PAGE> 155
EXHIBIT B
PLEDGE AND SECURITY AGREEMENT
PLEDGE AND SECURITY AGREEMENT dated as of December ___, 1998
between: IRIDIUM OPERATING LLC, a limited liability company duly organized and
validly existing under the laws of the State of Delaware (the "Company"); each
of the Subsidiaries of the Company identified under the caption "SUBSIDIARY
GUARANTORS" on the signature pages hereof (individually, a "Subsidiary
Guarantor" and, collectively, the "Subsidiary Guarantors" and, together with the
Company, the "Obligors"); and THE CHASE MANHATTAN BANK, as collateral agent
hereunder for the lenders party to the Credit Agreement referred to below (in
such capacity, together with its successors in such capacity, the "Collateral
Agent").
The Company, certain lenders, the Global Lead Arrangers, The Chase
Manhattan Bank, as the Administrative Agent and the Collateral Agent, and
Barclays Bank PLC, as the Documentation Agent, are parties to a Senior Secured
Credit Agreement dated as of December 23, 1998 (as modified, supplemented or
otherwise modified and in effect from time to time, the "Credit Agreement"),
providing, subject to the terms and conditions thereof, for loans to be made by
said lenders to the Company in an aggregate principal amount not exceeding
$800,000,000.
To induce said lenders to enter into the Credit Agreement and to
extend credit thereunder, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, each Obligor has
agreed to pledge and grant a security interest in the Collateral (as hereinafter
defined) as security for the Secured Obligations (as so defined). Accordingly,
the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms. Capitalized terms used but
not defined herein shall have their respective meanings in the Credit Agreement.
In addition, as used herein:
"Accounts" has the meaning assigned to such term in paragraph (g)
of Article III.
"Assigned Agreement" has the meaning assigned to such term in
paragraph (e) of Article III.
"Collateral" has the meaning assigned to such term in Article III.
"Copyright Collateral" means all Copyrights, whether now owned or
hereafter acquired by any Obligor, including each Copyright identified in
Annex 2.
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<PAGE> 156
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"Copyrights" has the meaning assigned to such term in paragraph
(o) of Article III.
"Depositary Accounts" means the "Accounts", as such term is
defined in the Depositary Agreement.
"Documents" has the meaning assigned to such term in paragraph (n)
of Article III.
"Equipment" has the meaning assigned to such term in paragraph (j)
of Article III.
"Hawaiian TTAC License" means the License Agreement dated December
1, 1993 between the Estate of James Campbell, as Licensor , and Motorola,
Inc., as Licensee, relating to all that certain real property consisting of
approximately 250,034 square feet or 5.74 acres, said property being a
portion of Lot 46, comprising 118,207 acres, located in Kaunala, District
of Koolaula, City and County of Honolulu, State of Hawaii, as shown on
Map 7, filed in the Office of the Assistant Registrar of the land court of
the State of Hawaii with Land Court application No. 1095 of the Trustees
under the Will and of the Estate of James Campbell, deceased, being a
portion of the land(s) described in Certificate of Title No. 17,854 issued
to the Trustees under the Will and of the Estate of James Campbell,
deceased.
"Instruments" has the meaning assigned to such term in paragraph
(h) of Article III.
"Intellectual Property" means, collectively, all Copyright
Collateral, all Patent Collateral, all Trademark Collateral and all of the
Collateral referred to in paragraphs (r), (s) and (t) of Article III.
"Inventory" has the meaning assigned to such term in paragraph (l)
of Article III.
"Iridium Clearing Account" has the meaning assigned to such term
in the Depositary Agreement.
"Patent Collateral" means all Patents, whether now owned or
hereafter acquired by any Obligor, including each Patent identified in
Annex 3.
"Patents" has the meaning assigned to such term in paragraph (p)
of Article III.
"Pledged Collateral" has the meaning assigned to such term in
paragraph (d) of Article III.
"Pledged Interests" has the meaning assigned to such term in
paragraph (b) of Article III.
Security Agreement
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"Pledged Stock" has the meaning assigned to such term in paragraph
(a) of Article III.
"Rolling Stock" has the meaning assigned to such term in paragraph
(k) of Article III.
"Secured Obligations" means, collectively, (a) in the case of the
Company, the principal of and interest on the Loans, all other amounts from
time to time owing to the Lenders or the Agents by the Company under the
Credit Documents (including, without limitation, hereunder) and all amounts
from time to time owing to any Lender or any Affiliate of any Lender by the
Company or any of its Subsidiaries in respect of any Hedging Agreement and
(b) in the case of each Subsidiary Guarantor, all obligations of such
Subsidiary Guarantor hereunder and under the Subsidiary Guarantee
Agreement.
"Secured Parties" means, collectively, the Lenders, the Collateral
Agent and the other Agents.
"Trademark Collateral" means all Trademarks, whether now owned or
hereafter acquired by any Obligor, including each Trademark identified in
Annex 4. Notwithstanding the foregoing, the Trademark Collateral does not
and shall not include any Trademark which would be rendered invalid,
abandoned, void or unenforceable by reason of its being included as part of
the Trademark Collateral.
"Trademarks" has the meaning assigned to such term in paragraph
(q) of Article III.
"Uniform Commercial Code" means the Uniform Commercial Code as in
effect from time to time in the State of New York.
SECTION 1.02. Terms Generally. The definitions of terms herein
shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
The word "will" shall be construed to have the same meaning and effect as the
word "shall". Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified, including an amendment
and restatement thereof, but subject to any restrictions on such amendments,
supplements or modifications set forth herein, (b) any reference herein to any
Person shall be construed to include such Person's successors and assigns or, in
the case of any Governmental Authority, any entity succeeding to any or all of
the functions of such Governmental Authority, (c) the words "herein", "hereof"
and "hereunder", and words of similar import, shall be construed to refer to
this Agreement in its entirety and not to any particular provision hereof, (d)
all references herein to Sections and Annexes shall be construed to refer to
Sections of, and Annexes to, this Agreement and (e) the words "asset" and
"property" shall be construed to have the same meaning and effect and to refer
to any and all
Security Agreement
<PAGE> 158
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tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Each Obligor represents and warrants to the Secured Parties that:
(a) Such Obligor is the sole beneficial owner of the Collateral in
which it purports to grant a security interest pursuant to Article III and
no Lien exists or will exist upon such Collateral at any time (and no right
or option to acquire the same exists in favor of any other Person), except
for Liens permitted under Section 7.02 of the Credit Agreement and except
for the pledge and security interest in favor of the Collateral Agent for
the benefit of the Lenders created or provided for herein, which pledge and
security interest constitute a first priority perfected pledge and security
interest in and to all of such Collateral (other than Intellectual Property
registered or otherwise located outside of the United States of America and
except as permitted under Section 7.02 of the Credit Agreement).
(b) Each of the Pledged Stock and the Pledged Interests identified
under the name of such Obligor in Annex 1 is, and all other Pledged Stock
and Pledged Interests in which such Obligor shall hereafter grant a
security interest pursuant to Article III will be, duly authorized, validly
existing, fully paid and non-assessable (except as provided in Section
18-607 of the Delaware LLC Act) and none of the Pledged Collateral is or
will be subject to any contractual restriction, or any restriction under
the charter, by-laws or other organizational documents of the respective
issuer thereof, upon the transfer of such Pledged Collateral (except for
any such restriction contained herein or in the Credit Agreement or as
required by law).
(c) The Pledged Stock and the Pledged Interests identified in
Annex 1 constitutes all (or, in the case of any Foreign Subsidiary prior to
the occurrence of an Event of Default, 65%) of the issued and outstanding
ownership interests of the issuer thereof on the date hereof (whether or
not registered in the name of any Obligor) and said Annex 1 correctly
identifies, as at the date hereof, the respective issuers thereof, the type
or class and par value of such ownership interests (if any), the respective
number of shares or units thereof, and registered owners thereof.
(d) Annexes 2, 3 and 4, respectively, set forth under the name of
such Obligor a complete and correct list of all Copyrights, Patents and
Trademarks owned by such Obligor on the date hereof; except pursuant to
licenses and other user agreements entered into by such Obligor in the
ordinary course of business, that are listed in Annex 5, such Obligor owns
and possesses the right to use, and has done nothing to authorize or enable
any other Person to use, any Copyright, Patent or Trademark listed in said
Annexes 2, 3 and 4, and all registrations listed in said Annexes 2, 3 and 4
are valid and in full force and
Security Agreement
<PAGE> 159
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effect; except as may be set forth in said Annex 5, such Obligor owns and
possesses the right to use all Copyrights, Patents and Trademarks.
(e) Annex 5 sets forth a complete and correct list of all material
licenses and other user agreements included in the Intellectual Property on
the date hereof.
(f) To such Obligor's knowledge, (i) except as set forth in Annex
5, there is no violation by others of any right of such Obligor with
respect to any Copyright, Patent or Trademark listed in Annexes 2, 3 and 4,
respectively, under the name of such Obligor and (ii) such Obligor is not
infringing in any respect upon any Copyright, Patent or Trademark of any
other Person; and no proceedings have been instituted or are pending
against such Obligor or, to such Obligor's knowledge, threatened, and no
claim against such Obligor has been received by such Obligor, alleging any
such violation, except as may be set forth in said Annex 5.
(g) Such Obligor does not own any Trademarks registered in the
United States of America to which the last sentence of the definition of
Trademark Collateral applies.
ARTICLE III
COLLATERAL
As collateral security for the prompt payment in full when due
(whether at stated maturity, by acceleration or otherwise) of the Secured
Obligations, each Obligor hereby pledges, assigns, hypothecates and transfers to
the Collateral Agent for the equal and ratable benefit of the Secured Parties,
and grants to the Collateral Agent for the equal and ratable benefit of the
Secured Parties a Lien on and security interest in, all of such Obligor's right,
title and interest in the following property, whether now owned by such Obligor
or hereafter acquired and whether now existing or hereafter coming into
existence (all being collectively referred to herein as "Collateral"):
(a) all shares of capital stock or other evidence of beneficial
interest of whatever class of any corporation, including, without
limitation, the shares of capital stock of each corporation identified in
Annex 1, now or hereafter owned by such Obligor, in each case together with
the certificates evidencing the same, but in the case of a Foreign
Subsidiary only to the extent set forth in Section 4.04(a)(i)
(collectively, the "Pledged Stock");
(b) all membership or other ownership interests of such Obligor in
any limited liability company, all limited partnership interests in any
limited partnership, all general partnership interests in any general
partnership, all joint venture interests in any joint venture and all
other equity or ownership interests of any Person of whatever kind or
nature, including, without limitation, the membership interests of the
limited liability companies identified in Annex 1, now or hereafter owned
by such Obligor, in each case together with the certificates (if any)
evidencing the same, including, without limitation, all of the right,
title and interest of such Obligor as a member, partner or other equity
Security Agreement
<PAGE> 160
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holder in, to and under any agreement or other instrument organizing or forming
such entity, as said agreement or instrument may be amended, supplemented or
modified and in effect from time to time, and (i) all rights of such Obligor to
receive moneys due but unpaid and to become due under or pursuant to such
agreement or instrument, (ii) all rights of such Obligor to participate in the
operation or management of such entity and to take actions or consent to actions
in accordance with the provisions of such agreement or instrument, (iii) all
rights of such Obligor to property of such entity, (iv) all rights of such
Obligor to receive proceeds of any insurance, bond, indemnity, warranty or
guaranty with respect to such agreement or instrument, (v) all claims of such
Obligor for damages arising out of or for breach of or default under such
agreement or instrument and (vi) all rights of such Obligor to terminate, amend,
supplement, modify or waive performance under such agreement or instrument, to
perform thereunder and to compel performance and otherwise to exercise all
remedies thereunder, but in the case of a Foreign Subsidiary only to the extent
set forth in Section 4.04(a)(i) (collectively, the "Pledged Interests"), and any
right, title and interest of the Company in, to and under the Company LLC
Agreement;
(c) all shares, interests, securities, moneys or other property
representing a dividend on any of the Pledged Stock or the Pledged
Interests, or representing a distribution or return of capital upon or in
respect of the Pledged Stock or the Pledged Interests, or resulting from a
split-up, revision, reclassification or other like change of the Pledged
Stock or the Pledged Interests or otherwise received in exchange therefor,
and all options, warrants and similar rights issued to the holders of, or
otherwise in respect of, the Pledged Stock or the Pledged Interests;
(d) without affecting the obligations of such Obligor under any
provision prohibiting such action hereunder or under the Credit Agreement,
in the event of any consolidation or merger of a Subsidiary in which one of
the Obligors is not the surviving entity, all ownership interests of
whatever class owned by such Obligor of the successor entity formed by or
resulting from such consolidation or merger (the Pledged Stock and the
Pledged Interests, together with all shares, interests, securities, moneys
or property as may from time to time be pledged hereunder pursuant to
clause (a), (b) or (c) above and this clause (d) being herein, and the
proceeds of and to any such property and, to the extent related to any such
property or such proceeds, all books, correspondence, credit files,
records, invoices and other papers, collectively called the "Pledged
Collateral");
(e) all contracts and agreements to which such Obligor is a party
and other similar consensual obligations owed to such Obligor including,
without limitation, the following:
(i) the Space System Contract;
(ii) the O&M Contract;
(iii) the Terrestrial Network Development Contract;
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(iv) each Gateway Authorization Agreement;
(v) the IBSS Agreement;
(vi) the Management Services Agreement;
(vii) the Memorandum of Understanding (including, without
limitation, the Motorola Guarantee Obligation); and
(viii) the Agreement Regarding Guarantee.
(said contracts, agreements and obligations, as so amended, supplemented
renewed or modified, including any such replacement or substitution
contracts, agreements and obligations, being, individually, an "Assigned
Agreement", and, collectively, the "Assigned Agreements"), including,
without limitation, (1) all rights of such Obligor to receive moneys due
and to become due under or pursuant to the Assigned Agreements, (2) all
rights to receive property, assets, services or other performance
thereunder, (3) all rights of such Obligor to receive return of any
premiums for or proceeds of any insurance, payment and/or performance bond,
indemnity, warranty or guaranty with respect to the Assigned Agreements or
to receive condemnation proceeds thereof, (4) all claims of such Obligor
for damages arising out of or for breach of or default under the Assigned
Agreements and (5) all rights of such Obligor to terminate, amend,
supplement, modify or waive performance under the Assigned Agreements, to
perform thereunder and to compel performance and otherwise to exercise all
remedies thereunder, in each case as such contract, agreement and
obligation may be amended, supplemented, renewed or otherwise modified,
including, without limitation, any agreement, contract or document
replacing or substituting for such contract, agreement or obligation from
time to time;
(f) all Government Approvals (including, without limitation, the
FCC License) now or hereafter held in the name, or for the benefit, of the
Company or any of its Subsidiaries, provided that any such Government
Approval which by its terms or by operation of law would become void,
voidable, terminable or revocable if mortgaged, pledged or assigned
hereunder or if a security interest therein was granted hereunder are
expressly excepted and excluded from the Lien and terms of this Agreement
to the extent necessary so as to avoid such voidness, avoidability,
terminability or revocability, but such security interest does include, to
the maximum extent permitted by law, all rights of such Obligor incident or
appurtenant to such Government Approval and the right of such Obligor to
receive all proceeds derived from or in connection with the sale,
assignment or transfer of such Government Approval;
(g) all accounts and general intangibles (each as defined in the
Uniform Commercial Code) of such Obligor constituting any right of such
Obligor to the payment of money, including, without limitation, all moneys
due and to become due to such Obligor under or in respect of the Assigned
Agreements, Government Approvals, franchises, licenses, permits,
subscriptions or other agreements or at law or in equity (whether or not
earned by performance and whether arising directly or indirectly and
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including claims for reimbursement, contribution, indemnity and
subrogation), rights of such Obligor to receive payments from any other
source but excluding the Pledged Collateral, and all tax refunds (such
accounts, general intangibles and moneys due and to become due being herein
called collectively "Accounts");
(h) all instruments, chattel paper or letters of credit (each as
defined in the Uniform Commercial Code) of such Obligor evidencing,
representing, arising from or existing in respect of, relating to, securing
or otherwise supporting the payment of, any of the Accounts, including (but
not limited to) promissory notes, drafts, bills of exchange and trade
acceptances (herein collectively called "Instruments");
(i) all other accounts or general intangibles of such Obligor not
constituting Accounts to the extent not otherwise specifically excluded in
this Article III;
(j) all equipment (as such term is defined in the Uniform
Commercial Code) of such Obligor including, without limitation, all
machinery, apparatus, installation facilities, satellites and other
tangible personal property of such Obligor of any nature whatsoever,
wherever located, and whether on earth or in orbit (herein collectively
called "Equipment");
(k) all automobiles, trucks, tractors, trailers and other rolling
stock or moveable personal property, including, without limitation, rolling
stock for which the title thereto is evidenced by a certificate of title
issued by the United States of America or any State thereof which permits
or requires a Lien thereon to be evidenced upon such title (herein
collectively called "Rolling Stock");
(l) all inventory (as such term is defined in the Uniform
Commercial Code) in all of its forms, wherever located (including, without
limitation: (i) spare parts inventory, consumable supplies inventory and
maintenance materials inventory and raw materials and work in progress
therefor, finished goods thereof, and materials used or consumed in the
manufacture or production thereof, (ii) goods in which such Obligor has an
interest in mass or a joint or other interest or right of any kind and
(iii) goods which are returned to or repossessed by such Obligor), and all
accessions thereto and products thereof and documentation therefor (herein
collectively called "Inventory");
(m) all rights, claims and benefits of such Obligor against any
Person arising out of, relating to or in connection with Inventory or
Equipment purchased by such Obligor, including, without limitation, any
such rights, claims or benefits against any Person storing or transporting
such Inventory or Equipment;
(n) all documents of title (as defined in the Uniform Commercial
Code) or other receipts of such Obligor covering, evidencing or
representing Inventory or Equipment (herein collectively called
"Documents");
(o) all copyrights, copyright registrations and applications for
copyright registrations, including, without limitation, all renewals and
extensions thereof, the right
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to recover for all past, present and future infringements thereof, and all
other rights of any kind whatsoever accruing thereunder or pertaining
thereto (herein collectively called "Copyrights");
(p) all patents and patent applications, including, without
limitation, the inventions and improvements described and claimed therein
together with the reissues, divisions, continuations, renewals, extensions
and continuations-in-part thereof, all income, royalties, damages and
payments now or hereafter due and/or payable under and with respect
thereto, including, without limitation, damages and payments for all past,
present and future infringements thereof, the right to sue for past,
present and future infringements thereof, and all rights corresponding
thereto throughout the world (herein collectively called "Patents");
(q) all trade names, trademarks and service marks, logos,
trademark and service mark registrations, and applications for trademark
and service mark registrations (including, without limitation, all renewals
of trademark and service mark registrations, and all rights corresponding
thereto throughout the world, but excluding any such registration that
would be rendered invalid, abandoned, void or unenforceable by reason of
its being included as part of the Collateral), the right to recover for all
past, present and future infringements thereof, all other rights of any
kind whatsoever accruing thereunder or pertaining thereto, together, in
each case, with the product lines and goodwill of the business connected
with the use of, and symbolized by, each such trade name, trademark and
service mark (herein collectively called "Trademarks");
(r) all inventions, processes, production methods, proprietary
information, know-how and trade secrets used in or relating to the Iridium
Business, and all licenses or user or other agreements granted to such
Obligor with respect to any of the foregoing in each case whether now or
hereafter owned or used including, without limitation, the material
licenses or other agreements with respect to any of the Copyright
Collateral, Patent Collateral or Trademark Collateral listed in Annex 5;
(s) all causes of action, claims and warranties now or hereafter
owned or acquired by such Obligor in respect of any of the items listed in
subsection (r) or (t) of this Article III or any of the Copyright
Collateral, Patent Collateral or Trademark Collateral;
(t) all information, customer lists, identification of suppliers,
data, plans, blueprints, designs, models, recorded knowledge, surveys,
architectural, structural, mechanical and engineering plans and
specifications, studies, reports and drawings, test reports, manuals,
material standards, processing standards, performance standards, catalogs,
computer and automatic machinery software and programs, all accounting
information and all media in which or on which any information or knowledge
or data or records may be recorded or stored and all computer programs used
for the compilation or printout of such information, knowledge, records or
data, prepared by or on behalf of such Obligor for the Iridium Business;
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(u) the Depositary Accounts, and all balances in each thereof and
all instruments, certificates and notes in respect of Permitted Investments
of such balances held or maintained from time to time in each thereof;
(v) all other general or special deposit accounts, including any
demand, time, savings, passbook or similar account maintained by such
Obligor with any bank, trust company, savings and loan association, credit
union or similar organization, and all money, cash, securities and other
properties of such Obligor deposited in any such account;
(w) all leases of personal property, whether such Obligor is the
lessor or the lessee thereunder, excluding leases of automobiles, fax
machines, copiers, typewriters and similar office equipment, but
specifically including (except as specifically excluded above in this
clause (w) and regardless of whether such items would constitute office
equipment) computers, computer peripherals, telephone equipment, telephone
switches, and all other types of communications equipment;
(x) all insurance policies (except, in the case of any insurance
policy not required to be maintained under Section 8.01 of the Credit
Agreement, to the extent the transfer or assignment of such insurance
policy would render such insurance policy void), whether owned by or
payable to such Obligor, insuring against any risks whatsoever (including,
without limitation, casualty, property damage, liability and death),
including, without limitation, all such policies required to be maintained
under Section 8.01 of the Credit Agreement with respect to any in-orbit
satellite or other property of such Obligor, all loss proceeds and other
amounts payable to such Obligor thereunder, any indemnity, warranty or
guaranty in respect of the property insured thereby, and all eminent domain
or similar proceeds or awards with respect thereto and all other rights of
such Obligor with respect thereto;
(y) to the extent the same constitutes personal property, the
Hawaiian TTAC License;
(z) all other tangible and intangible personal property and
fixtures of such Obligor (except to the extent expressly excluded above);
(aa) all books, correspondence, credit files, records, invoices,
ledgers and other papers of every kind and nature, including without
limitation all tapes, cards, computer runs and other papers and documents
in the possession or under the control of such Obligor or any computer
bureau or service company from time to time acting for such Obligor; and
(bb) all proceeds, products, offspring, rents, profits, royalties,
revenues, issues, income, benefits, accessions, additions, substitutions
and replacements of and to any of the property of such Obligor described in
the preceding clauses of this Section (including, without limitation, all
causes of action, claims and warranties now or hereafter held by any
Obligor in respect of any of the items listed above).
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Notwithstanding anything in this Article III to the contrary, the
Collateral shall not include the Iridium Clearing Account and any cash or
other property held therein or credited thereto from time to time.
ARTICLE IV
REMEDIES
In furtherance of the grant of the pledge and security interest
pursuant to Article III, the Obligors hereby jointly and severally agree with
the Secured Parties as follows:
SECTION 4.01. Delivery and Other Perfection. Each Obligor shall:
(a) if any of the shares, interests, securities, moneys or
property required to be pledged by such Obligor under clauses (a), (b), (c)
and (d) of Article III are received by such Obligor, forthwith either (i)
transfer and deliver to the Collateral Agent such shares or securities so
received by such Obligor (together with the certificates for any such
shares and securities duly endorsed in blank or accompanied by undated
stock powers duly executed in blank), all of which thereafter shall be held
by the Collateral Agent, pursuant to the terms of this Agreement, as part
of the Collateral, (ii) with respect to any Pledged Collateral that is not
evidenced by a certificate, execute and deliver written instructions to the
issuer thereof to register the Lien created hereunder in such Pledged
Collateral in the registration books maintained by such issuer for such
purpose and cause the respective Obligor to execute and deliver to the
Collateral Agent a written confirmation to the effect that the Lien created
hereunder in such Pledged Collateral has been duly registered in such
registration books, all in form and substance satisfactory to the
Collateral Agent or (iii) take such other action as the Collateral Agent
shall deem necessary or appropriate to duly perfect the Lien created
hereunder in such shares, interests, securities, moneys or property in said
clauses (a), (b), (c) and (d);
(b) deliver and pledge to the Collateral Agent any and all
Instruments, endorsed and/or accompanied by such instruments of assignment
and transfer in such form and substance as the Collateral Agent may
reasonably request; provided that so long as no Event of Default shall have
occurred and be continuing, such Obligor may retain for collection in the
ordinary course any Instruments, Accounts or General Intangibles received
by such Obligor and the Collateral Agent shall, promptly upon request of
such Obligor through the Company, make appropriate arrangements for making
any Instrument pledged by such Obligor available to such Obligor for
purposes of presentation, collection or renewal (any such arrangement to be
effected, to the extent reasonably deemed appropriate by the Collateral
Agent, against a trust receipt or like document);
(c) give, execute, deliver, file and/or record any financing
statement, notice, instrument, document, agreement or other papers that may
be necessary or desirable (in
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the reasonable judgment of the Collateral Agent) to create, preserve,
perfect or validate the security interest granted pursuant hereto or to
enable the Collateral Agent to exercise and enforce its rights hereunder
with respect to such pledge and security interest (it being understood that
the provisions of this Section will apply to all Collateral, whether
personal property or real property, whether tangible or intangible, and
wherever located and whenever acquired, including, without limitation,
Collateral located outside the United States or in space), including,
without limitation, causing any or all of the Pledged Collateral to be
transferred of record into the name of the Collateral Agent or its nominee
(and the Collateral Agent agrees that if any Pledged Collateral is
transferred into its name or the name of its nominee, the Collateral Agent
will thereafter promptly give to the respective Obligor copies of any
notices and communications received by it with respect to the Pledged
Collateral pledged by such Obligor hereunder), provided that notices to
account debtors or unaffiliated parties in respect of any Accounts,
Instruments or other Collateral referred to in clause (i) of Article III
shall be subject to the provisions of clause (h) below;
(d) keep full and accurate books and records in accordance with
generally accepted business practices relating to the Collateral, and stamp
or otherwise mark such books and records in such manner as the Collateral
Agent may reasonably require in order to reflect the security interests
granted by this Agreement;
(e) furnish to the Collateral Agent from time to time (but, unless
an Event of Default shall have occurred and be continuing, no more
frequently than quarterly) statements and schedules identifying and
describing any changes since the preceding such statement or schedule
regarding the Copyright Collateral, the Patent Collateral and the Trademark
Collateral, respectively, and such other reports in connection with the
Copyright Collateral, the Patent Collateral and the Trademark Collateral,
as the Collateral Agent may reasonably request, all in reasonable detail;
(f) promptly upon request of the Collateral Agent, following
receipt by the Collateral Agent of any statements, schedules or reports
pursuant to clause (e) above, modify this Agreement by amending Annexes 2,
3 and/or 4, as the case may be, to include any Copyright, Patent or
Trademark that becomes part of the Collateral under this Agreement;
(g) permit representatives of the Collateral Agent, upon
reasonable notice, at any time during normal business hours to inspect and
make abstracts from its books and records pertaining to the Collateral, and
permit representatives of the Collateral Agent to be present at such
Obligor's place of business to receive copies of all communications and
remittances relating to the Collateral, and forward copies of any notices
or communications received by such Obligor with respect to the Collateral,
all in such manner as the Collateral Agent may require; and
(h) upon the occurrence and during the continuance of any Event of
Default, upon request of the Collateral Agent, promptly notify (and such
Obligor hereby authorizes the Collateral Agent so to notify) each account
debtor in respect of any
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Accounts or Instruments that such Collateral has been assigned to the
Collateral Agent hereunder, and that any payments due or to become due in
respect of such Collateral are to be made directly to the Depositary Agent
for deposit into the General Receipt & Disbursement Account pursuant to the
Depositary Agreement.
SECTION 4.02. Other Financing Statements and Liens. Except as
otherwise permitted under Section 7.02 of the Credit Agreement, without the
prior written consent of the Collateral Agent, no Obligor shall file or suffer
to be on file, or authorize or permit to be filed or to be on file, in any
jurisdiction, any financing statement or like instrument with respect to the
Collateral in which the Collateral Agent is not named as the sole secured party
for the benefit of the Lenders.
SECTION 4.03. Preservation of Rights. The Collateral Agent shall
not be required to take steps necessary to preserve any rights
against prior parties to any of the Collateral.
SECTION 4.04. Special Provisions Relating to Certain Collateral.
(a) Pledged Collateral.
(i) The Obligors will cause the Pledged Collateral to constitute
at all times (x) 100% of the aggregate ownership interests of each
Subsidiary of the Company (other than any Foreign Subsidiary or any
Domestic Subsidiary directly owned by any Foreign Subsidiary) then
outstanding and (y) in the case of each Foreign Subsidiary directly owned
by the Company and/or by any other Obligor which is a Domestic Subsidiary,
65% (and, from and after the occurrence of an Event of Default, 100%) of
the total number of shares or other ownership interests having ordinary
voting power for the election of the board of directors (or equivalent
body) of such Foreign Subsidiary (the "Ordinary Shares") and 100% of each
other class or type of ownership interests of such Foreign Subsidiary,
provided that upon the occurrence of an Event of Default, the Obligors
will, with respect to any Ordinary Shares not theretofore comprising
Pledged Collateral, upon the request of the Collateral Agent, take all
action required under this Agreement (including, without limitation,
Section 4.01) in the case of Pledged Collateral.
(ii) So long as no Event of Default shall have occurred and be
continuing, the Obligors shall have the right to exercise all voting,
consensual and other powers of ownership pertaining to the Pledged
Collateral, provided that each Obligor agrees that it will not vote the
Pledged Collateral pledged by it hereunder in any manner that is
inconsistent with the terms of this Agreement, the Credit Agreement or any
such other instrument or agreement; and the Collateral Agent shall execute
and deliver to the Obligors or cause to be executed and delivered to the
Obligors all such proxies, powers of attorney, dividend and other orders,
and all such instruments, without recourse, as the Obligors may reasonably
request for the purpose of enabling the Obligors to exercise the rights and
powers that they are entitled to exercise pursuant to this paragraph
(a)(ii).
(iii) No Subsidiary of the Company shall be restricted from
declaring and paying to any Obligor any dividends or distributions in
respect of its ownership interests held by
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the Obligor, provided that all such dividends and distributions shall be
paid directly to the Depositary Agent for deposit into the General Receipt
& Disbursement Account and shall be held therein and/or applied for the
purposes permitted under the Depositary Agreement. If, notwithstanding the
foregoing, such dividends or distributions shall be paid to any Obligor,
the same shall be held by such Obligor in trust for the Collateral Agent
and the other Secured Parties, segregated from the other funds of such
Obligor, and promptly turned over to the Depositary Agent for deposit into
the aforesaid account.
(b) Assigned and Other Agreements. Anything herein to the contrary
notwithstanding, each Obligor party to any Assigned Agreement or other relevant
agreement shall remain liable under such Assigned Agreement or other agreement
to the extent set forth therein to perform all of its duties and obligations
thereunder to the same extent as if this Agreement had not been executed. The
exercise by the Collateral Agent of any of the rights hereunder shall not
release any Obligor from any of its duties or obligations under any Assigned
Agreement or any such other agreement, except to the extent provided therein or
any consent and agreement relating thereto and upon foreclosure and assignment
of such Assigned Agreement. Neither the Collateral Agent nor any of the other
Secured Parties shall have any obligation or liability under any Assigned
Agreement or such other agreement, by reason of the existence of this Agreement,
nor shall the Collateral Agent, nor any of the other Secured Parties, be
obligated to perform any of the obligations or duties of any Obligor thereunder
or to take action to collect or enforce any claim for payment assigned
hereunder, except to the extent provided therein or any such consent and
agreement. If any Obligor fails to perform any agreement contained herein or in
any of the Assigned Agreements or other agreements constituting part of the
Collateral required to be performed by such Obligor, within 30 days after
receipt by the Company of written notice from the Collateral Agent informing it
of such failure, the Collateral Agent may itself perform, or cause the
performance of, such agreement, and the expenses of the Collateral Agent
incurred in connection therewith shall be payable by the Company and shall be
Secured Obligations entitled to the benefits of the collateral security provided
pursuant to Article III.
(c) Intellectual Property.
(i) For the purpose of enabling the Collateral Agent to exercise
rights and remedies under Section 4.05 at such time as the Collateral Agent
shall be lawfully entitled to exercise such rights and remedies, and for no
other purpose, each Obligor hereby grants to the Collateral Agent, to the
extent assignable, an irrevocable, non-exclusive license (exercisable
without payment of royalty or other compensation to such Obligor) to use,
assign, license or sublicense any of the Intellectual Property now owned or
hereafter acquired by such Obligor, wherever the same may be located,
including in such license reasonable access to all media in which any of
the licensed items may be recorded or stored and to all computer programs
used for the compilation or printout thereof.
(ii) Notwithstanding anything contained herein to the contrary,
but subject to the provisions of Section 7.04 of the Credit Agreement that
limit the right of the Obligors to dispose of their property, so long as no
Event of Default shall have occurred and be continuing, the Obligors will
be permitted to exploit, use, enjoy, protect, license, sublicense, assign,
sell, dispose of or take other actions with respect to the Intellectual
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Property in the ordinary course of the business of the Obligors. In
furtherance of the foregoing, unless an Event of Default shall have
occurred and be continuing the Collateral Agent shall from time to time,
upon the request of the respective Obligor through the Company, execute and
deliver any instruments, certificates or other documents, in the form so
requested, that such Obligor through the Company shall have certified are
appropriate (in their judgment) to allow them to take any action permitted
above (including relinquishment of the license provided pursuant to
paragraph (i) immediately above as to any specific Intellectual Property).
Further, upon the payment in full of all of the Secured Obligations and
cancellation or termination of the Commitments or earlier expiration of
this Agreement or release of the Collateral, the Collateral Agent shall
grant back to the Obligors the license granted pursuant to said paragraph
(i). The exercise of rights and remedies under Section 4.05 by the
Collateral Agent shall not terminate the rights of the holders of any
licenses or sublicenses theretofore granted by the Obligors in accordance
with the first sentence of this paragraph (ii).
(d) FCC License. The Company agrees to request a transfer of the
FCC License to a wholly-owned Subsidiary of the Company pursuant to Section 18.H
of the Space System Contract at the earliest time as the Company reasonably
believes that it can satisfy the qualifications of an FCC licensee under
applicable law and FCC regulations and policy. Upon such transfer the FCC
License shall be held in the name of such Subsidiary and, subject to Section
5.13 and any restriction under any then effective Government Rule, the Company
shall forthwith comply with the requirements of Section 4.01 in order to provide
the Collateral Agent a first priority perfected security interest in all of the
ownership interests of such Subsidiary and the requirements of Section 6.12(a)
of the Credit Agreement with respect to such Subsidiary. If the Company shall
fail for any reason to make such request at such time and such failure shall
continue unremedied for a period of 30 days or any Event of Default shall have
occurred and be continuing, the Collateral Agent is hereby authorized to make
such request and the Company will take any action that the Collateral Agent
shall reasonably request in order to facilitate such transfer to a Subsidiary of
the Company as contemplated hereby. Notwithstanding anything herein or in the
Credit Agreement to the contrary, the Company will not create, incur, assume or
permit to exist any Lien on the ownership interests of such Subsidiary or the
assets thereof, including, without limitation, the FCC License (except any
Permitted Lien). If there shall be a change in law, or the rules or policies of
the FCC which would permit the granting of a security interest in the FCC
License prior to or after the date of the transfer of the FCC License as
contemplated herein, the Company will, and will cause its relevant License
Subsidiary to, take such action as the Administrative Agent may reasonably
request (including, without limitation an amendment to this Agreement or the
execution and delivery of a new security agreement with respect thereto on terms
comparable hereto in all material respects), in order to create a first priority
perfected security interest in the FCC License in favor of the Collateral Agent
for the benefit of the Secured Parties.
(e) Satellites. Each Obligor agrees and acknowledges that the
Collateral includes satellites and that the Collateral Agent intends to perfect
its security interest in and Lien on all such satellites. Without limiting in
any respect any other provisions of this Agreement, each Obligor agrees to
assist the Collateral Agent in achieving such perfection through whatever method
or methods the Collateral Agent may from time to time reasonably request,
including
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(i) filing UCC financing statements on the basis that satellites constitute
"mobile goods" under the Uniform Commercial Code, (ii) filing UCC financing
statements or other Lien perfection documents in each jurisdiction in which any
satellite is manufactured, integrated or processed, from where any satellite is
launched, from where it is controlled or in which it may from time to time be
deemed located to the extent such filing in such jurisdiction is reasonably
required in order to perfect and maintain the perfection of the Collateral
Agent's security interests therein and Liens thereon, (iii) taking all actions
required to be consistent with present and future practices of third-party
creditors intending to perfect security interests in satellites owned by United
States persons launched from the United States or from any other location from
which the satellites for the Iridium System have been, or are intended to be,
launched, and (iv) taking all actions reasonably required from time to time to
create, maintain and perfect security interests in satellites (both before and
after launch and while in orbit) as specified in any United States, foreign or
international law, regulation, convention or treaty relating to the creation,
perfection and/or priority of security interests and Liens in satellites that is
applicable to satellites of the type deployed in the Iridium System.
(f) Rolling Stock. At any time after the occurrence and during the
continuance of an Event of Default, each Obligor shall, upon the request of the
Collateral Agent, deliver to the Collateral Agent originals of the certificates
of title or ownership for the Rolling Stock owned by it with a fair market value
in excess of $100,000 with the Collateral Agent listed as lienholder and take
such other action as the Collateral Agent shall reasonably deem appropriate to
perfect the security interest created hereunder in all such Rolling Stock. Upon
the sale of any such Rolling Stock permitted under the Credit Agreement, so long
as no Event of Default shall have occurred and be continuing, upon the request
of any Obligor, the Collateral Agent shall execute and deliver to such Obligor
such instruments as such Obligor shall reasonably request to remove the notation
of the Collateral Agent as lienholder on the certificate of title or ownership
for any such Rolling Stock; provided that any such instruments shall be
delivered, and the release effective only upon receipt by the Collateral Agent
of a certificate from such Obligor stating that the Rolling Stock the lien on
which is to be released is to be sold or has suffered a casualty loss (with
title thereto passing to the casualty insurance company therefor in settlement
of the claim for such loss).
(g) Governmental Collateral. The Company shall notify the
Collateral Agent of any Collateral which constitutes a claim against the United
States or any foreign government or state or any instrumentality, agency or
subdivision thereof, the assignment of which claim is restricted by applicable
law or requires particular procedures. Upon the request of the Collateral Agent,
the relevant Obligor will take all reasonable actions required to comply, to the
Collateral Agent's satisfaction, with such legal requirements and procedures
applicable with respect to such Collateral, including, without limitation, the
Assignment of Claims Act of 1940, as amended, or any similar applicable law.
(h) MOU Agreements. At any time after the occurrence and during
the continuation of an Event of Default, the Collateral Agent shall have the
right to exercise all rights, powers and remedies of the Company under the MOU
Agreements, including without limitation the right to require Motorola to
provide its guarantee(s) pursuant to Section 1(e) of the Memorandum of
Understanding. The Company agrees to the Collateral Agent exercising such
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rights, powers and/or remedies directly against Motorola under such
circumstances, and, so long as any Event of Default shall be continuing, agrees
not to exercise any such right, power or remedy without the prior written
consent of the Collateral Agent. Without limiting the foregoing, upon the
occurrence of a Trigger Event, the Company agrees to require Motorola to perform
the Motorola Guarantee Obligation in accordance with Section 8.09 of the Credit
Agreement. If the Company shall fail for any reason to make any demand upon
Motorola required under said Section 8.09, such failure shall constitute an
Event of Default under the Credit Agreement and the Collateral Agent is hereby
authorized to make such demand upon Motorola and the Company will take any
action that the Collateral Agent shall reasonably request in order to effect the
Motorola Guarantee.
SECTION 4.05. Events of Default. During the period during which an
Event of Default shall have occurred and be continuing:
(a) each Obligor shall, at the request of the Collateral Agent,
assemble the Collateral owned by it at such place or places, reasonably
convenient to both the Collateral Agent and such Obligor, designated in its
request;
(b) the Collateral Agent may make any reasonable compromise or
settlement deemed desirable with respect to any of the Collateral and may
extend the time of payment, arrange for payment in installments, or
otherwise modify the terms of, any of the Collateral;
(c) the Collateral Agent shall have all of the rights and remedies
with respect to the Collateral of a secured party under the Uniform
Commercial Code (whether or not said Code is in effect in the jurisdiction
where the rights and remedies are asserted) and such additional rights and
remedies to which a secured party is entitled under the laws in effect in
any jurisdiction where any rights and remedies hereunder may be asserted,
including, without limitation, the right, to the maximum extent permitted
by law, to exercise all voting, consensual and other powers of ownership
pertaining to the Collateral as if the Collateral Agent were the sole and
absolute owner thereof (and each Obligor agrees to take all such action as
may be reasonably necessary to give effect to such right);
(d) the Collateral Agent in its discretion may, in its name or in
the name of the Obligors or otherwise, demand, sue for, collect or receive
any money or property at any time payable or receivable on account of or in
exchange for any of the Collateral, but shall be under no obligation to do
so; and
(e) the Collateral Agent may, upon 30 days' prior written notice
to the Obligors of the time and place, with respect to the Collateral or
any part thereof that shall then be or shall thereafter come into the
possession, custody or control of the Secured Parties or any of their
respective agents, sell, lease, assign or otherwise dispose of all or any
part of such Collateral, at such place or places as the Collateral Agent
deems best, and for cash or for credit or for future delivery, at public or
private sale, without demand of performance or notice of intention to
effect any such disposition or of the time or place thereof (except such
notice as is required above or by applicable statute and cannot be
Security Agreement
<PAGE> 172
-18-
waived), and any Secured Party or anyone else may be the purchaser, lessee,
assignee or recipient of any or all of the Collateral so disposed of at any
public sale (or, to the extent permitted by law, at any private sale) and
thereafter hold the same absolutely, free from any claim or right of
whatsoever kind, including any right or equity of redemption (statutory or
otherwise), of the Obligors, any such demand, notice and right or equity
being hereby expressly waived and released. In the event of any sale,
assignment, or other disposition of any of the Trademark Collateral, the
goodwill connected with and symbolized by the Trademark Collateral subject
to such disposition shall be included, and the Obligors shall supply to the
Collateral Agent or its designee, for inclusion in such sale, assignment or
other disposition, all Intellectual Property relating to such Trademark
Collateral. The Collateral Agent may, without notice or publication,
adjourn any public or private sale or cause the same to be adjourned from
time to time by announcement at the time and place fixed for the sale, and
such sale may be made at any time or place to which the sale may be so
adjourned.
Notwithstanding anything herein or in any other Security Document
to the contrary, neither the Collateral Agent nor any of the other Secured
Parties shall sell, lease, assign or otherwise dispose, or cause the sale,
lease, assignment or other disposition, of all or any part of the Collateral
pursuant to this Agreement unless not less than 10 days prior thereto the
Collateral Agent shall have made a demand (or caused a demand to be made) in
respect of the Reserve Capital Call Obligations in accordance with Section 4.02
of the Iridium LLC Agreement, provided that (i) nothing herein shall be
construed to limit the rights of the Collateral Agent to exercise any other
remedies hereunder prior to any such sale, lease, assignment or other
disposition or from and after any event affecting any Credit Party or Iridium
LLC described in clause (i) or (j) of Section 9.01 of the Credit Agreement and
(ii) the requirement of this paragraph shall not apply if the aggregate
outstanding amount in respect of the Loans (net of any cash balances in the
Depositary Accounts) shall exceed the aggregate amount of the Reserve Capital
Call Obligations.
The proceeds of each collection, sale or other disposition under
this Section, including by virtue of the exercise of the license granted to the
Collateral Agent in Section 4.04(c), shall be applied in accordance with Section
4.09. Any such sale or other disposition under this Section shall be conducted
in a commercially reasonable manner.
The Obligors recognize that, by reason of certain prohibitions
contained in the Securities Act of 1933, as amended, and applicable state
securities laws, the Collateral Agent may be compelled, with respect to any sale
of all or any part of the Collateral, to limit purchasers to those who will
agree, among other things, to acquire the Collateral for their own account, for
investment and not with a view to the distribution or resale thereof. The
Obligors acknowledge that any such private sales may be at prices and on terms
less favorable to the Collateral Agent than those obtainable through a public
sale without such restrictions, and, notwithstanding such circumstances, agree
that any such private sale shall be deemed to have been made in a commercially
reasonable manner and that the Collateral Agent shall have no obligation to
engage in public sales and no obligation to delay the sale of any Collateral for
the period of time necessary to permit the respective issuer thereof to register
it for public sale.
Security Agreement
<PAGE> 173
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SECTION 4.06. Deficiency. If the proceeds of sale, collection or
other realization of or upon the Collateral pursuant to Section 4.05 are
insufficient to cover the costs and expenses of such realization and the payment
in full of the Secured Obligations, the Obligors shall remain (in the case of
each Subsidiary Obligor, jointly and severally) liable for any deficiency.
SECTION 4.07. Removals, Etc. Without at least 30 days' prior
written notice to the Collateral Agent, no Obligor shall (i) maintain the
original or "master" copies of any of its books and records with respect to the
Collateral at any office or maintain its principal place of business at any
place, or (except with respect to Collateral in the possession of the Collateral
Agent) permit any property to be located anywhere other than at one of the
locations identified in Annex 6 under its name (other than satellites in orbit
or "Foreign Local Accounts" referred to in the Depositary Agreement), (ii)
change its name from the name shown on the signature pages hereto or (iii) adopt
or do business under any name other than a name beginning with the word
"Iridium".
SECTION 4.08. Private Sale. No Secured Party shall incur any
liability as a result of the sale of the Collateral, or any part thereof, at any
private sale pursuant to Section 4.05 conducted in a commercially reasonable
manner. Each Obligor hereby waives any claims against the Secured Parties
arising by reason of the fact that the price at which the Collateral may have
been sold at such a private sale was less than the price that might have been
obtained at a public sale or was less than the aggregate amount of the Secured
Obligations, even if the Collateral Agent accepts the first offer received and
does not offer the Collateral to more than one offeree.
SECTION 4.09. Application of Proceeds. Except as otherwise herein
expressly provided, the proceeds of any collection, sale or other realization of
all or any part of the Collateral pursuant hereto, and any other cash at the
time held by the Collateral Agent under this Agreement, shall be applied by the
Collateral Agent:
First, to the payment of the costs and expenses of such
collection, sale or other realization, including reasonable out-of-pocket
costs and expenses of the Collateral Agent and the reasonable fees and
expenses of its agents and counsel, and all reasonable expenses incurred
and advances made by the Collateral Agent in connection therewith;
Next, to the payment in full of the Secured Obligations, in each
case equally and ratably in accordance with the respective amounts thereof
then due and owing or as the Lenders holding the same may otherwise agree;
and
Finally, to the payment to the respective Obligor, or their
respective successors or assigns, or as a court of competent jurisdiction
may direct, of any surplus then remaining.
As used in this Article, "proceeds" of Collateral means cash,
securities and other property realized in respect of, and distributions in kind
of, Collateral, including any thereof received under any reorganization,
liquidation or adjustment of debt of the Obligors or any issuer of or obligor on
any of the Collateral.
Security Agreement
<PAGE> 174
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SECTION 4.10. Attorney-in-Fact. Without limiting any rights or
powers granted by this Agreement to the Collateral Agent while no Event of
Default has occurred and is continuing, upon the occurrence and during the
continuance of any Event of Default the Collateral Agent is hereby appointed the
attorney-in-fact of each Obligor for the purpose of carrying out the provisions
hereof and taking any action and executing any instruments that the Collateral
Agent may reasonably deem necessary or advisable to accomplish the purposes
hereof, which appointment as attorney-in-fact is irrevocable and coupled with an
interest. Without limiting the generality of the foregoing, so long as the
Collateral Agent shall be entitled under this Article IV to make collections in
respect of the Collateral, the Collateral Agent shall have the right and power
to receive, endorse and collect all checks made payable to the order of any
Obligor representing any dividend, payment or other distribution in respect of
the Collateral or any part thereof and to give full discharge for the same.
SECTION 4.11. Perfection. Prior to or concurrently with the
execution and delivery of this Agreement, each Obligor shall (i) file such
financing statements and other documents in such offices as the Collateral Agent
may reasonably request to perfect the security interests granted by Article III,
(ii) take any action (including establishing satisfactory control arrangements)
as the Collateral Agent may reasonably request to perfect the pledge of any
ownership interests for purposes of Article 8 of the Uniform Commercial Code
and/or (iii) deliver to the Collateral Agent all certificates identified in
Annex 1, accompanied by undated stock or transfer powers duly executed in blank.
SECTION 4.12. Release of Collateral; Termination.
(a) Upon any disposition of property permitted under the Credit
Documents or any disposition to which the Required Lenders have consented or
upon any disposition in connection with any Event of Loss, the Lien on such
property shall be released, and the Collateral Agent shall promptly execute and
deliver, at the expense of the relevant Obligor, such release and/or other
documents related thereto as reasonably requested by such Obligor.
(b) When all Secured Obligations shall have been paid in full and
the Commitments of the Lenders under the Credit Agreement shall have expired or
been terminated, this Agreement shall terminate, and the Collateral Agent shall
forthwith cause to be assigned, transferred and delivered, against receipt but
without any recourse, warranty or representation whatsoever, any remaining
Collateral and money received in respect thereof, to or on the order of the
respective Obligor and to be released and canceled all licenses and rights
referred to in Section 4.04(c). The Collateral Agent shall also execute and
deliver to the respective Obligor upon such termination such Uniform Commercial
Code termination statements and such other documentation as shall be reasonably
requested by the respective Obligor to effect the termination and release of the
Liens on the Collateral.
SECTION 4.13. Further Assurances. Each Obligor agrees that, from
time to time upon the written request of the Collateral Agent, such Obligor will
execute and deliver such further documents and do such other acts and things as
the Collateral Agent may reasonably request in order fully to effect the
purposes of this Agreement. Without limiting the foregoing,
Security Agreement
<PAGE> 175
-21-
each Obligor hereby authorizes the Collateral Agent to file one or more
financing or continuation statements, and amendments thereto, relative to all or
any part of the Collateral without the signature of such Obligor where permitted
by law, provided that copies of any such statement or amendment thereto shall
promptly be delivered to the Company.
ARTICLE V
MISCELLANEOUS
SECTION 5.01. No Waiver. No failure on the part of the Collateral
Agent or any other Secured Party to exercise, and no course of dealing with
respect to, and no delay in exercising, any right, power or remedy hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise by
the Collateral Agent or any other Secured Party of any right, power or remedy
hereunder preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. The remedies herein are cumulative and are not
exclusive of any remedies provided by law.
SECTION 5.02. Notices. All notices, requests, consents and demands
hereunder shall be in writing and telecopied or delivered to the intended
recipient at (i) in the case of each Obligor, the "Address for Notices" for the
Company specified pursuant to Section 11.01 of the Credit Agreement and (ii) in
the case of the Collateral Agent, at the "Address for Notices" for the
Administrative Agent specified in Section 11.01 of the Credit Agreement, and
shall be deemed to have been given at the times specified in said Section 11.01.
SECTION 5.03. Expenses.
(a) The Obligors jointly and severally agree to reimburse each of
the Lenders and the Collateral Agent for all reasonable costs and expenses of
the Lenders and the Collateral Agent (including, without limitation, the
reasonable fees and expenses of legal counsel) in connection with (i) any Event
of Default and any enforcement or collection proceeding resulting therefrom,
including, without limitation, all manner of participation in or other
involvement with (w) performance by the Collateral Agent of any obligations of
the Obligors in respect of the Collateral that the Obligors have failed or
refused to perform, (x) bankruptcy, insolvency, receivership, foreclosure,
winding up or liquidation proceedings, or any actual or attempted sale, or any
exchange, enforcement, collection, compromise or settlement in respect of any of
the Collateral, and for the care of the Collateral and defending or asserting
rights and claims of the Collateral Agent in respect thereof, by litigation or
otherwise, including expenses of insurance, (y) judicial or regulatory
proceedings and (z) workout, restructuring or other negotiations or proceedings
(whether or not the workout, restructuring or transaction contemplated thereby
is consummated) and (ii) the enforcement of this Section, and all such costs and
expenses shall be Secured Obligations entitled to the benefits of the collateral
security provided pursuant to Article III.
Security Agreement
<PAGE> 176
-22-
(b) The Company will pay all filing, registration and recording
fees or refiling, re-registration and re-recording fees, and all expenses
incident to the execution and delivery of this Agreement, any agreement
supplemental hereto and any instruments of further assurance, and all federal,
state, county and municipal stamp taxes and other taxes, duties, imposts,
assessments and charges arising out of or in connection with the execution and
delivery of this Agreement, any agreement supplemental hereto and any
instruments of further assurance.
(c) The Company will pay, before any fine, penalty, interest or
cost attaches thereto, all taxes, assessments and other governmental or
non-governmental charges or levies now or hereafter assessed or levied against
the Collateral or upon the Liens provided for herein (except for taxes and
assessments not then delinquent or which the Company may, pursuant to the
provisions of Section 6.03 of the Credit Agreement, permit to remain unpaid) as
well as pay, or cause to be paid, all claims for labor, materials or supplies
which, if unpaid, might by law become a Lien (other than a Lien permitted under
Section 7.02 of the Credit Agreement) thereon, and will retain copies of, and,
upon request, permit the Collateral Agent to examine, receipts showing payment
of any of the foregoing.
SECTION 5.04. Amendments, Etc. The terms of this Agreement may be
waived, altered or amended only by an instrument in writing duly executed by
each Obligor and the Collateral Agent. Any such amendment or waiver shall be
binding upon the Collateral Agent, each other Secured Party and each Obligor.
SECTION 5.05. Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the respective successors and assigns
of each Obligor, the Collateral Agent and each other Secured Party provided,
however, that no Obligor shall assign or transfer its rights hereunder without
the prior written consent of the Collateral Agent.
SECTION 5.06. Captions. The caption and section headings used
herein are for convenience of reference only, are not part of this Agreement and
shall not affect the construction of, or be taken into consideration in
interpreting, this Agreement.
SECTION 5.07. Counterparts. This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract.
SECTION 5.08. Governing Law; Jurisdiction; Consent to Service of
Process.
(a) This Agreement shall be construed in accordance with and
governed by the law of the State of New York.
(b) Each Obligor hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of the Supreme
Court of the State of New York sitting in New York County and of the United
States District Court of the Southern District of New York, and any appellate
court from any thereof, in any action or proceeding arising out of or relating
to this Agreement, or for recognition or enforcement of any judgment, and each
of the parties hereto hereby irrevocably and unconditionally agrees that all
claims in respect of any such action or proceeding may be heard and determined
in such New York State or, to the extent
Security Agreement
<PAGE> 177
-23-
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that the
Collateral Agent or any other Secured Party may otherwise have to bring any
action or proceeding relating to this Agreement against any Obligor or its
properties in the courts of any jurisdiction.
(c) Each Obligor hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement in any court referred to
in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.
(d) To the extent that any Obligor may be or become entitled, in
any jurisdiction in which judicial proceedings may at any time be commenced with
respect to this Agreement, to claim for itself or its property or revenues any
immunity from suit, court jurisdiction, attachment prior to judgment, attachment
in aid of execution of a judgment, execution of a judgment or from any other
legal process or remedy relating to its obligations under this Agreement and to
the extent that in any such jurisdiction there may be attributed such an
immunity (whether or not claimed), such Obligor hereby irrevocably agrees not to
claim and hereby irrevocably waives such immunity to the fullest extent
permitted by the laws of such jurisdiction.
SECTION 5.09. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 5.10. No Third Party Beneficiaries. The agreements of the
parties hereto are solely for the benefit of the Obligors, the Collateral Agent
and the other Secured Parties, and no other Person (including, without
limitation, any other Credit Party, any contractor, subcontractor, supplier or
materialman furnishing supplies, goods or services to or for the benefit of the
Iridium Business or any other creditor of the Company or any of its
Subsidiaries) shall have any rights hereunder.
SECTION 5.11. Agents and Attorneys-in-Fact. The Collateral Agent
may employ agents and attorneys-in-fact in connection herewith and shall not be
responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it in good faith.
Security Agreement
<PAGE> 178
-24-
SECTION 5.12. Severability. Any provision of this Agreement held
to be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 5.13. FCC Approval. Notwithstanding any other provision of
this Agreement, from and after the transfer of the FCC License to the Company or
any of its Subsidiaries pursuant to Section 18.H of the Space System Contract,
no action shall be taken hereunder by the Collateral Agent or any other Secured
Party with respect to any item of Collateral that would constitute or result in
any assignment of the FCC License or any change of control of the holder of the
FCC License, if, under then existing applicable law, regulations and FCC
policies, such assignment or change of control would require the prior approval
of the FCC. The Company agrees to take, or to cause its Subsidiaries to take, at
the Company's expense, any action that the Collateral Agent may reasonably
request in order to obtain from the FCC such approval as may be necessary (a) to
enable the Collateral Agent to exercise and enjoy the full rights and benefits
granted to the Collateral Agent by this Agreement and each other agreement,
instrument and document delivered to the Collateral Agent in connection herewith
and (b) for any action or transaction contemplated by this Agreement for which
such approval is or shall be required by law, and specifically, without
limitation, upon request by the Collateral Agent, to prepare, sign and file with
the FCC the assignor's or transferor's portion of any application or
applications for consent to the assignment of any license or transfer of control
necessary or appropriate under the FCC's rules and regulations, or for approval
of any sale of the Collateral provided by this Agreement by or on behalf of the
Collateral Agent or assumption by the Collateral Agent of voting rights relating
thereto effected in accordance with the terms hereof.
Security Agreement
<PAGE> 179
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IN WITNESS WHEREOF, the parties hereto have caused this Pledge and
Security Agreement to be duly executed and delivered as of the day and year
first above written.
COMPANY
IRIDIUM OPERATING LLC
By
-------------------------
Name:
Title:
Security Agreement
<PAGE> 180
-26-
SUBSIDIARY GUARANTORS
IRIDIUM CAPITAL CORPORATION
By
------------------------
Name:
Title:
IRIDIUM IP LLC
By
------------------------
Name:
Title:
IRIDIUM ROAMING LLC
By
------------------------
Name:
Title:
IRIDIUM FACILITIES CORPORATION
By
------------------------
Name:
Title:
Security Agreement
<PAGE> 181
COLLATERAL AGENT
THE CHASE MANHATTAN BANK,
as Collateral Agent
By
------------------------
Name:
Title:
Security Agreement
<PAGE> 182
ANNEX 1
PLEDGED COLLATERAL
[See Sections 2(b) and (c) and 3(a) and (b)]
<TABLE>
<CAPTION>
Type or
Class of Number of
Certificate Registered Ownership Shares or
Issuer Nos. (if any) Owner Interests Interests
- ------ ------------- ---------- --------- ---------
<S> <C> <C> <C> <C>
Iridium Capital 3 IOLLC Common Stock 100%
Corporation
Iridium Facilities 1 IOLLC Common Stock 100%
Corporation
Iridium Roaming 1 IOLLC Membership Interests 100%
LLC
Iridium IP LLC 1 IOLLC Membership Interests 100%
Iridium Canada
Facilities, Inc. C-3, C-4 IOLLC Common Stock 65%
</TABLE>
Annex 1 to Security Agreement
<PAGE> 183
ANNEX 2
LIST OF COPYRIGHTS, COPYRIGHT REGISTRATIONS AND
APPLICATIONS FOR COPYRIGHT REGISTRATIONS
[See Section 2(d)]
NONE
Annex 2 to Security Agreement
<PAGE> 184
ANNEX 3
LIST OF PATENTS AND PATENT APPLICATIONS
[See Section 2(d)]
Patents: None
Patent Applications: See attached (All intellectual property interests held by
Iridium IP LLC)
Annex 3 to Security Agreement
<PAGE> 185
ANNEX 4
LIST OF TRADE NAMES, TRADEMARKS, SERVICES MARKS,
TRADEMARK AND SERVICE MARK REGISTRATIONS AND
APPLICATIONS FOR TRADEMARK AND SERVICE MARK REGISTRATIONS
[See Section 2(d)]
U.S. TRADEMARKS
See attached (All intellectual property interests held by Iridium IP LLC)
FOREIGN TRADEMARKS
See attached (All intellectual property interests held by Iridium IP LLC)
Annex 4 to Security Agreement
<PAGE> 186
ANNEX 5
LIST OF CONTRACTS, LICENSES AND OTHER AGREEMENTS
[See Section 2(d), (e) and (f)]
(Iridium Operating LLC is party to all contracts listed below)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
COMPANY CONTRACT DATE
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
Andersen Consulting Iridium Master Agreement between 12/16/96
Iridium LLC and Andersen
Consulting LLP
- ------------------------------------------------------------------------------------------------------
Motorola Iridium Operations & Maintenance 12/15/92
Contract between Motorola, Inc.
and Iridium LLC, as amended
- ------------------------------------------------------------------------------------------------------
Motorola Iridium Space System Contract between 12/15/92
Motorola, Inc. and Iridium LLC, as
amended
- ------------------------------------------------------------------------------------------------------
Motorola Iridium Terrestrial Network 07/29/93
Development Contract between
Motorola, Inc. and Iridium LLC, as
amended
- ------------------------------------------------------------------------------------------------------
Gateways Gateway Business System Deployment Varies with
and License Agreement Gatetway
- ------------------------------------------------------------------------------------------------------
</TABLE>
Annex 5 to Security Agreement
<PAGE> 187
ANNEX 6
LIST OF LOCATIONS
[See Section 5.07]
Iridium Operating LLC
Arizona - Maricopa County
California
Delaware - New Castle County
District of Columbia
Hawaii
Virginia - Fairfax County
Virginia - Loudoun County
Iridium Facilities Corporation
Arizona - Maricopa County
Delaware - New Castle County
District of Columbia
Hawaii
Virginia - Fairfax County
Virginia - Loudoun County
Iridium Capital Corporation
Delaware - New Castle County
District of Columbia
Iridium IP LLC
Delaware - New Castle County
District of Columbia
Iridium Roaming LLC
Delaware - New Castle County
District of Columbia
Iridium Canada Facilities
New Brunswick, Canada
Annex 6 to Security Agreement
<PAGE> 188
EXHIBIT C
PLEDGE AND SECURITY AGREEMENT
PLEDGE AND SECURITY AGREEMENT dated as of December ___, 1998
between: IRIDIUM LLC, a limited liability company duly organized and validly
existing under the laws of the State of Delaware ("Iridium LLC"); and THE CHASE
MANHATTAN BANK, as collateral agent for the Secured Parties referred to below
(in such capacity, together with its successors in such capacity, the
"Collateral Agent").
Iridium Operating LLC (the "Company"), a Delaware limited
liability company and Wholly Owned Subsidiary of Iridium LLC, certain lenders,
the Global Lead Arrangers, The Chase Manhattan Bank as Administrative Agent and
Collateral Agent, and Barclays Bank PLC, as Documentation Agent are parties to a
Senior Secured Credit Agreement dated as of December 23, 1998 (as modified,
supplemented or otherwise modified and in effect from time to time, the "Credit
Agreement"), providing, subject to the terms and conditions thereof, for loans
to be made by said lenders to the Company in an aggregate principal amount not
exceeding $800,000,000.
To induce said lenders to enter into the Credit Agreement and to
extend credit thereunder and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Iridium LLC has agreed
to pledge and grant a security interest in the Collateral (as hereinafter
defined) as security for the Secured Obligations (as so defined). Accordingly,
the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms. Capitalized terms used but not
defined herein shall have their respective meanings in the Credit Agreement. In
addition, as used herein:
"Collateral" has the meaning assigned to such term in
Section 3.01.
"Iridium Agreements" means this Agreement, the Memorandum of
Understanding and the Agreement Regarding Guarantee.
"Iridium LLC Equity Issuance" means (a) any issuance or sale by
Iridium LLC of (i) any of its membership interests, capital stock or other
equity interests, (ii) any warrants or options exercisable in respect
thereof or (iii) any other security or instrument representing an equity
interest in Iridium LLC, including any evidence of Indebtedness, interests,
other securities or rights that are exchangeable for or exercisable or
convertible
Parent Security Agreement
<PAGE> 189
-2-
into equity interests of Iridium LLC, either immediately or upon the
arrival of a specified date or the occurrence of a specified event
(excluding, in the case of this clause (a), any issuance or sale pursuant
to the obligations under the Agreement Regarding Guarantee relating to
compensation in the form of equity interests of Iridium LLC or warrants
therefor) or (b) the receipt by Iridium LLC after the date hereof of any
capital contribution (whether or not evidenced by any equity security
issued by the recipient of such contribution).
"Iridium LLC Members" means each of the holders from time to time
of membership interests of Iridium LLC.
"Iridium Services" means the wholesale distribution by the Company
of the services referred to in the "Iridium Services" section of Part 3 of
the Information Memorandum as "Iridium World Satellite Services", "Iridium
World Roaming Services", "Iridium World Page Services", "Iridium World
Calling Card Services" and "Aeronautical Services".
"IWCL" means Iridium World Communications Ltd., a Bermuda company.
"IWCL Equity Issuance" means (a) any issuance of sale by IWCL of
(i) any of its membership interests, capital stock or other equity
interests, (ii) any warrants or options exercisable in respect thereof or
(iii) any other security or instrument representing an equity interest in
IWCL, including any evidence of Indebtedness, interests, other securities
or rights that are exchangeable for or exercisable or convertible into
equity interests of IWCL, either immediately or upon the arrival of a
specified date or the occurrence of a specified event (excluding, in the
case of this clause (a), any issuance or sale pursuant to the obligations
under the Agreement Regarding Guarantee relating to compensation in the
form of equity interests of IWCL or warrants therefor) or (b) the receipt
by IWCL after the date hereof of any capital contribution (whether or not
evidenced by any equity security issued by the recipient of such
contribution).
"Management Services Agreement" means the Amended and Restated
Management Services Agreement dated as of December 18, 1997 among IWCL,
Iridium LLC and the Company with respect to, among other things, the
provision of management, personnel and administrative services by Iridium
LLC to the Company.
"Material Adverse Effect" means a material adverse effect on (a)
the business, operations, assets, condition (financial or otherwise) or
prospects of the Company and any of its Subsidiaries taken as a whole, (b)
the ability of Iridium LLC to perform its obligations hereunder or under
the Management Services Agreement, (c) the validity or enforceability of
the Liens under any Security Document (including without limitation the
Liens created hereunder) or on the Collateral thereunder or hereunder or
the validity or enforceability thereof or hereof or (d) the operation of
the Iridium System.
"Related Business" means the business of developing, owning,
engaging in and dealing with all or any part of the business of the
provision of telecommunications
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services and businesses and (a) reasonably related extensions thereof,
including but not limited to the manufacture, purchase, ownership,
operation, leasing, licensing, financing and selling of, and generally
dealing in or with, communications satellites, earth stations, gateways,
ground infrastructure and subscriber equipment, used or intended for use
with telecommunications services and businesses and (b) any other
activities that are reasonably related to the provision of
telecommunications services and businesses. For avoidance of doubt,
"Related Business" shall include any business or activities carried out by
Iridium LLC or any Unrelated Subsidiary in connection with the development
of the next generation Iridium global wireless communications system.
"Reserve Capital Call Obligations" means the obligations of
certain of the Iridium LLC Members (as identified in Annex D to the Iridium
LLC Agreement) to purchase up to a total of 18,206,550 of additional Class
1 Interests of Iridium LLC at a price of $13.33 per interest pursuant to
Section 4.02 of the Iridium LLC Agreement.
"Responsible Officer" means the chief executive officer, chief
financial officer or general counsel or any senior vice president of
Iridium LLC or, with respect to Section 4.02, any vice president of Iridium
LLC.
"Secured Obligations" means collectively, (a) all obligations of
the Company in respect of principal of and interest on the Loans and all
other amounts owing by the Company and its Subsidiaries to the Lenders or
the Agents under the Credit Agreement, the other Credit Documents and all
amounts from time to time owing to any Lender or any Affiliate of any
Lender by the Company or any of its Subsidiaries in respect of any Hedging
Agreement, (b) all obligations of each Subsidiary Guarantor under the
Subsidiary Guarantee Agreement and (c) all obligations of Iridium LLC to
the Collateral Agent and other Secured Parties hereunder.
"Secured Parties" means the Agents (including the Collateral
Agent) and the Lenders.
"Uniform Commercial Code" means the Uniform Commercial Code as in
effect from time to time in the State of New York.
"Unrelated Subsidiary" means a Subsidiary of Iridium LLC (other
than the Company) engaged in a Related Business that is not a Subsidiary of
the Company.
SECTION 1.02. Terms Generally. The definitions of terms herein
shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
The word "will" shall be construed to have the same meaning and effect as the
word "shall". Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified, including an amendment
and restatement thereof, but subject to any
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restrictions on such amendments, supplements or modifications set forth herein,
(b) any reference herein to any Person shall be construed to include such
Person's successors and assigns or, in the case of any Government Authority, any
entity succeeding to any or all of the functions of such Government Authority,
(c) the words "herein", "hereof" and "hereunder", and words of similar import,
shall be construed to refer to this Agreement in its entirety and not to any
particular provision hereof, (d) all references herein to Sections and Annexes
shall be construed to refer to Sections of, and Annexes to, this Agreement and
(e) the words "asset" and "property" shall be construed to have the same meaning
and effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Iridium LLC represents and warrants to the Secured Parties that:
SECTION 2.01. Corporate Existence. Iridium LLC: (a) is a limited
liability company duly organized and validly existing under the laws of the
State of Delaware; (b) has all requisite corporate or other power, and has all
material governmental licenses, authorizations, consents and approvals necessary
to own its assets and carry on its business as now being or as proposed to be
conducted; and (c) is qualified to do business in all jurisdictions in which the
nature of the business conducted by it makes such qualification necessary and
where failure so to qualify could (either individually or in the aggregate)
reasonably to be expected to result in a Material Adverse Effect.
SECTION 2.02. No Breach. None of the execution and delivery of any
of the Iridium Agreements, the consummation of the transactions herein or
therein contemplated or compliance with the terms and provisions hereof or
thereof will conflict with or result in a breach of, or require any consent
under, the Iridium LLC Agreement or the Company LLC Agreement, or any applicable
law or regulation, or any material order, writ, injunction or decree of any
court or governmental authority or agency, or any material agreement or
instrument to which Iridium LLC or any of its Subsidiaries is a party or by
which any of them is bound or to which any of them is subject, or constitute a
default under any such agreement or instrument, or (except for Permitted Liens)
result in the creation or imposition of any Lien upon any of the Collateral
pursuant to the terms of any such agreement or instrument.
SECTION 2.03. Action. Iridium LLC has all necessary limited
liability company power and authority to execute, deliver and perform its
obligations under the Iridium Agreements; the execution, delivery and
performance by Iridium LLC of the Iridium Agreements have been duly authorized
by all necessary action on its part; and each Iridium Agreement has been duly
and validly executed and delivered by Iridium LLC and constitutes its legal,
valid and binding obligation, enforceable against Iridium LLC in accordance with
its terms, except as such enforceability may be limited by (a) bankruptcy,
insolvency, reorganization, moratorium or other similar laws of general
applicability affecting the
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enforcement of creditors' rights and (b) the application of general principles
of equity (regardless of whether considered in a proceeding in equity or at
law).
SECTION 2.04. Approvals. No authorizations, approvals or consents
of, and no filings or registrations with, any Government Authority are necessary
for the execution, delivery or performance by Iridium LLC of any of the Iridium
Agreements or for the validity or enforceability hereof or thereof, except (i)
for filings and recordings in respect of the Liens created pursuant hereto and
(ii) that, at any time after the transfer of the FCC License to the Company or
any of its Subsidiaries pursuant to the Space System Contract, the exercise of
certain remedies hereunder may require the prior approval of the FCC.
SECTION 2.05. Financial Condition. Iridium LLC has heretofore
furnished to the Lenders the consolidated balance sheet and statements of
income, stockholders' equity and cash flows for Iridium LLC (i) as of and for
the fiscal year ended December 31, 1997, reported on by KPMG Peat Marwick LLP,
independent public accountants and (ii) as of and for the fiscal quarter and the
portion of the fiscal year ended September 30, 1998, certified by the chief
financial officer of Iridium LLC. Such financial statements present fairly, in
all material respects, the consolidated financial position and results of
operations and cash flows of Iridium LLC and its Subsidiaries as of such dates
and for such periods in accordance with GAAP, subject to year-end audit
adjustments and the absence of footnotes in the case of the statements referred
to in clause (ii) above. Since December 31, 1997, except as disclosed in the
Information Memorandum, there has been no change in the business, assets,
operations, prospects or condition, financial or otherwise, of Iridium LLC and
its Subsidiaries, taken as a whole, that (either individually or in the
aggregate) could reasonably be expected to result in a Material Adverse Effect.
SECTION 2.06. Proceedings. Except as described in Schedule V to
the Credit Agreement, there is no action, suit or proceeding at law or in equity
or by or before any Government Authority, arbitral tribunal or other similar
body now pending or, to the best knowledge of Iridium LLC, threatened against
Iridium LLC or any of its Subsidiaries or any of their respective property
(including, without limitation, the Iridium Business), which has resulted in, or
could reasonably be expected to result in, a Material Adverse Effect.
SECTION 2.07. Investment and Holding Company Status. Iridium LLC
is not (a) an "investment company" or a company "controlled" by a company
registered as an "investment company", as such terms are defined in the
Investment Company Act of 1940 or (b) a "holding company", or an "affiliate" of
a company registered as a "holding company" or a "subsidiary company" of a
company registered as a "holding company", within the meaning of the Public
Utility Holding Company Act of 1935.
SECTION 2.08. Taxes. Iridium LLC has filed or caused to be filed
all tax returns that are required to be filed, and has paid all Taxes shown to
be due and payable on said returns or on any assessments made against Iridium
LLC or any of its property (other than Taxes (i) the payment of which is not yet
due or which are being contested in good faith by appropriate proceedings and
for which such Person has set aside on its books adequate reserves or (ii) the
failure of which to pay could not reasonably be expected to result in a Material
Adverse Effect),
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and no tax Liens have been filed (a) with respect to any of the Collateral
(other than Permitted Liens) or (b) that would have a Material Adverse Effect,
and no claims are being asserted with respect to any such Taxes. The charges,
accruals and reserves on the books of Iridium LLC in respect of Taxes and other
governmental charges are, in the opinion of Iridium LLC, adequate.
SECTION 2.09. ERISA. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect.
SECTION 2.10. Capitalization. Iridium LLC has heretofore delivered
to the Lenders a true and complete copy of the Iridium LLC Agreement. The
members of Iridium LLC on the date hereof are those identified in Schedule I.
SECTION 2.11. Collateral.
(a) Iridium LLC has all right, title and interest in, to and
under, and is the record owner of, the Collateral in which it purports to grant
a security interest pursuant to Section 3.01 and no Lien exists or will exist
upon the Collateral at any time (and no right or option to acquire the same
exists in favor of any other Person), except for the pledge and security
interest in favor of the Collateral Agent for the benefit of the Secured Parties
created or provided for herein, which pledge and security interest constitute a
first priority perfected pledge and security interest in and to all of the
Collateral (except for Permitted Liens).
(b) The membership interests of the Company identified in Annex 1
are, and all other membership interests of the Company in which Iridium LLC
shall hereafter grant a security interest pursuant to Section 3.01 will be, duly
authorized, validly existing, fully paid and non-assessable (except as provided
in Section 18-607 of the Delaware LLC Act). Except for any restriction contained
herein, there does not exist any contractual restriction on (i) the sale,
assignment, transfer or disposition by the Collateral Agent of any of the
membership interests of the Company pledged hereunder in connection with the
exercise by the Collateral Agent of its remedies hereunder, (ii) the admission
of any transferee of such membership interests as a member of the Company or
(iii) otherwise on the exercise by the Collateral Agent of any of its remedies
hereunder in respect of such membership interests.
(c) The membership interests of the Company identified in Annex 1
constitute all of the ownership interests of the Company issued and outstanding
on the date hereof (whether or not registered in the name of Iridium LLC) and
Iridium LLC is the owner of all such ownership interests.
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ARTICLE III
PLEDGE AND SECURITY INTEREST
SECTION 3.01. Pledge. As collateral security for the prompt
payment in full when due (whether at stated maturity, by acceleration or
otherwise) of the Secured Obligations now existing or hereafter arising, Iridium
LLC hereby pledges, assigns, hypothecates and transfers to the Collateral Agent
for the equal and ratable benefit of the Secured Parties, and hereby grants to
the Collateral Agent for the equal and ratable benefit of the Secured Parties a
Lien on and security interest in, all of Iridium LLC's right, title and interest
in, to and under the following, whether now owned by Iridium LLC or hereafter
acquired and whether now existing or hereafter coming into existence and
wherever located (all being collectively referred to herein as the
"Collateral"):
(a) all of its membership interests in the Company together with
the certificate or certificates (if any) evidencing the same and all of its
right, title and interest in, to and under the Company LLC Agreement,
including, without limitation, (i) all rights of Iridium LLC to receive
moneys due but unpaid and to become due thereunder or pursuant thereto,
(ii) all rights of Iridium LLC to participate in the operation or
management of the Company and to take actions or consent to actions in
accordance with the provisions thereof, (iii) all rights of Iridium LLC
pursuant thereto to property of the Company, (iv) all rights of Iridium LLC
to receive proceeds of any insurance, bond, indemnity, warranty or guaranty
with respect thereto, (v) all claims of Iridium LLC for damages arising out
of or for breach of or default thereunder and (vi) all rights of Iridium
LLC to terminate, amend, supplement, modify or waive performance under any
of the terms provisions of the Company LLC Agreement, to perform thereunder
and to compel performance and otherwise to exercise all remedies
thereunder;
(b) all shares, interests, securities, moneys or property
representing a dividend upon, or representing a distribution or return of
capital upon or with respect to, such membership interests or resulting
from a split-up, revision, reclassification or other like change thereof or
otherwise received in exchange therefor, and any subscription warrants,
rights or options issued to the holders of, or otherwise in respect of
thereof;
(c) without affecting the obligations of Iridium LLC under any
provision prohibiting such action hereunder, in the event of any
consolidation or merger of the Company in which the Company is not the
surviving entity, all ownership interests of whatever class owned by
Iridium LLC of the successor entity formed by or resulting from such
consolidation or merger (such membership interests, together with all
shares, interests, securities, moneys or property as may from time to time
be pledged hereunder pursuant to clause (a) or (b) above and this clause
(c) being herein, and the proceeds of and to any such property and, to the
extent related to any such property or such proceeds, all books,
correspondence, credit files, records, invoices and other papers,
collectively called the "Member Collateral");
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(d) all rights of Iridium LLC (including rights delegated to its
directors or officers) in respect of the Reserve Capital Call Obligations,
including, without limitation, all rights to compel performance of the
Reserve Capital Call Obligations, to terminate, amend, supplement, modify
or waive performance thereof and otherwise to exercise rights and remedies
in respect thereof (but not including any indemnity rights which any of the
directors or officers of Iridium LLC may have relating to the Reserve
Capital Call Obligations);
(e) all rights of Iridium LLC in any insurance policies required
to be maintained under Section 8.01 of the Credit Agreement, to the extent
that Iridium LLC is a named insured thereunder; and
(f) all proceeds, products, offspring, rents, profits, royalties,
revenues, issues, income, benefits, accessions, additions, substitutions
and replacements of and to any and all of the property of Iridium LLC
described in the preceding clauses of this Section and, to the extent
related to any such property, all books, correspondence, credit files,
records, invoices and other papers.
SECTION 3.02. Member Remains Liable. Anything herein to the
contrary notwithstanding, Iridium LLC shall remain liable under the Company LLC
Agreement to the extent set forth therein to perform all of its duties and
obligations thereunder to the same extent as if this Agreement had not been
executed. The exercise by the Collateral Agent of any of the rights hereunder
shall not release Iridium LLC from any of its duties or obligations under the
Company LLC Agreement. The Collateral Agent shall not have any obligation or
liability under the Company LLC Agreement by reason of this Agreement, nor shall
the Collateral Agent be obligated to perform any of the obligations or duties of
Iridium LLC thereunder or to take any action to collect or enforce any claim for
payment assigned hereunder. In the event that the Collateral Agent on behalf of
the Secured Parties or its designee(s) succeeds to Iridium LLC's interest in, to
and under the membership interests of the Company whether by foreclosure or
otherwise, the Collateral Agent on behalf of the Secured Parties or its
designee(s) shall assume liability for all of the obligations of Iridium LLC as
a member under the Company LLC Agreement, provided that such liability shall not
include any liability for claims against Iridium LLC arising from Iridium LLC's
failure to perform during the period prior to the Collateral Agent's or such
designee(s)' succession to Iridium LLC's interest in, to and under such
membership interests.
ARTICLE IV
COVENANTS
Iridium LLC agrees that, until the payment and satisfaction in
full of the Secured Obligations and the expiration or termination of the
Commitments of the Lenders under the Credit Agreement:
SECTION 4.01. Financial Statements and Other Information. Iridium
LLC will furnish to the Administrative Agent and each Lender (but, in the case
of clauses (a) through (d)
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below, only if at such time Iridium LLC shall be required to prepare financial
statements of the type referred to below for filing with the SEC):
(a) within 120 days after the end of each fiscal year of Iridium
LLC, the audited consolidated balance sheet and related statements of
operations, members' equity and cash flows of Iridium LLC and its
Subsidiaries as of the end of and for such year, setting forth in each case
in comparative form the figures for the previous fiscal year, all reported
on by KPMG Peat Marwick LLP or other independent public accountants of
recognized national standing (without a "going concern" or like
qualification or exception and without any qualification or exception as to
the scope of such audit) to the effect that such consolidated financial
statements present fairly in all material respects the financial condition
and results of operations of Iridium LLC and its Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied;
(b) within 60 days after the end of each of the first three fiscal
quarters of each fiscal year of Iridium LLC, the consolidated balance sheet
and related statements of operations, members' equity and cash flows of
Iridium LLC and its Subsidiaries as of the end of and for such fiscal
quarter and the then elapsed portion of the fiscal year, setting forth in
each case in comparative form the figures for (or, in the case of the
balance sheet, as of the end of) the corresponding period or periods of the
previous fiscal year, all certified by a Responsible Officer as presenting
fairly in all material respects the financial condition and results of
operations of Iridium LLC and its Subsidiaries on a consolidated basis in
accordance with GAAP consistently applied, subject to normal year-end audit
adjustments and the absence of footnotes;
(c) concurrently with any delivery of financial statements under
clause (a) or (b) of this Section, a certificate of a Responsible Officer
stating whether any change in GAAP or in the application thereof has
occurred since the date of the most recent audited financial statements
delivered to the Administrative Agent pursuant hereto and, if any such
change has occurred, specifying the effect of such change on the financial
statements accompanying such certificate;
(d) promptly upon receipt, copies of all formal accountants'
letters received by Iridium LLC's management in respect of Iridium LLC
(other than any such letters relating solely to Unrelated Subsidiaries);
(e) promptly after the same become publicly available, copies of
all periodic and other reports, proxy statements and other materials filed
by IWCL or Iridium LLC with the SEC or any national securities exchange or
distributed by Iridium LLC to its members generally; and
(f) promptly following any request therefor, such other
information regarding the operations, business affairs and financial
condition of Iridium LLC (but excluding any information not included under
Section 4.06), as the Administrative Agent or any Lender (through the
Administrative Agent) may reasonably request.
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SECTION 4.02. Notices of Material Events. Iridium LLC will
furnish, or will cause to be furnished, to the Administrative Agent and each
Lender prompt written notice of:
(a) Iridium LLC becoming aware of the occurrence of any Default
relating to Iridium LLC;
(b) the filing or commencement of any action, suit or proceeding
by or before any arbitrator or Government Authority against or affecting
Iridium LLC that, if adversely determined, could reasonably be expected to
result in a Material Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or together with
any other ERISA Events that have occurred, could reasonably be expected to
result in liability of Iridium LLC and its Subsidiaries in an aggregate
amount exceeding $2,000,000; and
(d) any other circumstance, act or condition relating to Iridium
LLC which could reasonably be expected to result in a Material Adverse
Effect.
Each notice delivered under this Section shall be accompanied by a statement of
a Responsible Officer setting forth the details of the event or development
requiring such notice and any action taken or proposed to be taken with respect
thereto.
SECTION 4.03. Maintenance of Existence. Iridium LLC will preserve
and maintain (a) its legal existence and (b) all of its licenses, Government
Approvals, rights, privileges, franchises and property (if any) which are
material to the Iridium Business and the due performance of all of its
obligations and the exercise of all of its rights under the Transaction
Documents to which it is party, provided that nothing in this Section shall be
construed to prohibit any transaction permitted under this Article IV.
SECTION 4.04. Taxes. Iridium LLC will (a) pay and discharge, or
effectively provide for, all Taxes that are imposed on Iridium LLC or on its
income or profits or on any of its property prior to the date on which penalties
for the failure to pay or discharge such Taxes attach thereto, other than Taxes
the failure of which to pay could not reasonably be expected to have a Material
Adverse Effect, provided that Iridium LLC shall have the right to contest in
good faith by appropriate proceedings the validity or amount of any such Tax,
and (b) promptly pay any valid, final judgment enforcing any such Tax and cause
the same to be satisfied of record.
SECTION 4.05. Compliance with Laws; Government Approvals. Iridium
LLC will comply in all respects with all applicable Government Rules applicable
to it or its property and all Government Approvals now or hereafter held by it,
unless the failure to so comply could not reasonably be expected to have a
Material Adverse Effect.
SECTION 4.06. Inspection Rights. Subject to the same
confidentiality requirements set forth in Section 11.12 of the Credit Agreement
that are applicable to the Company, Iridium LLC will permit representatives of
any of the Global Lead Arrangers, the Agents or the Lenders, upon reasonable
prior notice to Iridium LLC unless a Default shall have occurred and is
continuing, to visit and inspect its property, to examine, copy or make excerpts
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from its books, records and documents and to discuss its affairs, finances and
accounts with its principal officers, engineers and independent accountants to
the extent such property, books, records, documents, affairs, finances and
accounts relate to the business or operation of Company, the Iridium Business or
the Collateral hereunder, all at such reasonable times during normal business
hours and at such intervals as such representatives may reasonably request.
Iridium LLC hereby authorizes each of its principal officers, engineers and
independent accountants to discuss Iridium LLC's affairs, finances and accounts
as contemplated by this Section.
SECTION 4.07. Indebtedness. Iridium LLC will not create, incur,
assume or permit to exist any Indebtedness of Iridium LLC, except: (a)
Indebtedness (including Capital Lease Obligations) incurred in the ordinary
course of business of Iridium LLC in the performance of its duties under the
Management Services Agreement or otherwise in carrying out its activities in
connection with the Iridium Business; (b) other Indebtedness of Iridium LLC,
provided that (i) the proceeds of such Indebtedness (or, in the case of any
Indebtedness of an Unrelated Subsidiary that is Guaranteed by Iridium LLC, such
Indebtedness) shall be used in the acquisition or business (including the
financing thereof) of an Unrelated Subsidiary, (ii) such Indebtedness shall not
have a maturity earlier than one year after the Maturity Date or provide any
amortization or redemption of principal prior to such date, (iii) such
Indebtedness shall not place any limitations on the activities of the Company
and its Subsidiaries or the activities of Iridium LLC in connection with the
Iridium Business, (iv) such Indebtedness may contain such other terms and
conditions (including, without limitation, covenants and events of default, but
excluding terms as to pricing and terms that are applicable solely after the
Maturity Date) applicable to Iridium LLC that are not more restrictive than the
terms set forth in the Credit Agreement (assuming such terms were applicable to
Iridium LLC) and (v) such Indebtedness may not be secured by a Lien on any
property of Iridium LLC other than the equity interests of any Unrelated
Subsidiary; and (c) other Indebtedness not exceeding $50,000,000 in the
aggregate principal amount outstanding at any one time; provided that this
Section shall not (A) be construed to restrict the ability of any Unrelated
Subsidiary to incur or have outstanding any Indebtedness and (B) apply to any
Indebtedness incurred by any Unrelated Subsidiary that is secured by a pledge of
the equity interests of such Unrelated Subsidiary (and no other property of
Iridium LLC) and is not Guaranteed by Iridium LLC.
SECTION 4.08. Liens. Iridium LLC will not create, incur, assume or
suffer to exist any Lien on any property, except (a) the Liens created pursuant
to this Agreement, (b) Liens on equity interests of Unrelated Subsidiaries and
(c) any other Lien that could not reasonably be expected to have a Material
Adverse Effect.
SECTION 4.09. Membership Interests. Iridium LLC will not consent
to, or take any other action to effect, (a) the creation of any other membership
or other ownership interest in the Company (other than the membership interests
in the Company outstanding as of the date hereof) or (b) (except for any
restriction contained herein) the creation of any contractual restriction on (i)
the sale, assignment, transfer or the disposition by the Collateral Agent of any
of the membership interests of the Company pledged hereunder in connection with
the exercise by the Collateral Agent of its remedies hereunder, (ii) the
admission of any transferee of such
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membership interests as a member of the Company or (iii) otherwise on the
exercise by the Collateral Agent of any of its remedies hereunder in respect of
such membership interests.
SECTION 4.10. Mergers, Consolidations, Etc. Iridium LLC will not
enter into any transaction of merger, consolidation or amalgamation, or
liquidate, wind up or dissolve itself (or suffer any liquidation of
dissolution), or convey, transfer or lease its property substantially as an
entirety to any person.
SECTION 4.11. Investments. Iridium LLC will not make or permit to
remain outstanding any Investments other than (a) the investment in the
membership interests of the Company, (b) Permitted Investments and (c) equity
investments in Unrelated Subsidiaries or other Persons engaged in any Related
Business that are from the proceeds of the issuance of equity interests in IWCL,
Iridium LLC or any Unrelated Subsidiary and/or Indebtedness permitted under
Section 4.07.
SECTION 4.12. Transactions with Affiliates. Iridium LLC will not
sell, lease or otherwise transfer any property or assets to, or purchase, lease
or otherwise acquire any property or assets from, or otherwise engage in any
other transactions with, any of its Affiliates, except (a) transactions on terms
which, in the opinion of Iridium LLC, are not less favorable to Iridium LLC than
could be obtained on an arm's-length basis from unrelated third parties and (b)
any transaction which could not reasonably be expected to have a Material
Adverse Effect.
SECTION 4.13. Nature of Business. Iridium LLC will not engage in
any business, activities or transactions other than in connection with the
Iridium Business or any Related Business. Without limiting the foregoing,
Iridium LLC will take from time to time all necessary action to ensure that the
Iridium Services are provided in all substantial respects by or through the
Company and its Subsidiaries (including pursuant to contracts or agreements
between the Company or any of its Subsidiaries and any other person), and that
at all times substantially all of the assets which are necessary for the
provision of the Iridium Services that are owned or held by Iridium LLC and its
Subsidiaries are owned or held by the Company and its Subsidiaries; provided,
however, that nothing in this Section shall prevent Iridium LLC or any Unrelated
Subsidiary from engaging in, or owning assets related to, any Related Business
described in the last sentence of the definition thereof.
SECTION 4.14. Company LLC Agreement. Iridium LLC will not (a)
cancel or terminate the Company LLC Agreement or consent to or accept any
cancellation or termination thereof, (b) amend, supplement or otherwise modify
the Company LLC Agreement in a manner that would be materially adverse to the
interests of the Lenders under the Credit Documents or materially adversely
affect the rights or remedies of the Collateral Agent hereunder or the
Collateral or (c) petition, request or take any other legal or administrative
action that seeks, or may reasonably be expected, to rescind, terminate, amend,
modify or suspend in any way prohibited under clause (b) above the Company LLC
Agreement, without the prior consent of the Administrative Agent (acting with
the approval of the Required Lenders). Iridium LLC shall provide the
Administrative Agent with prior written notice of each proposed modification,
supplement or waiver in respect of thereof not less than 10 Business Days prior
to the proposed effective date thereof (and the Administrative Agent shall
promptly provide copies thereof to
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each Lender). Promptly following the effectiveness of each such modification,
supplement or waiver, Iridium LLC shall provide the Administrative Agent with a
copy thereof as executed and delivered by the parties thereto (and the
Administrative Agent shall promptly provide a copy thereof to each Lender).
SECTION 4.15. Iridium LLC Agreement.
(a) Iridium LLC will not (i) take any action, or permit any action
to be taken, to effect (x) the cancellation or termination of the Iridium LLC
Agreement or (y) any amendment, supplement or otherwise modification of the
Iridium LLC Agreement in a manner that would be materially adverse to the
interests of the Lenders under the Credit Documents or materially adversely
affect the rights or remedies of the Collateral Agent hereunder or the
Collateral or (ii) petition, request or take any other legal or administrative
action that seeks, or may reasonably be expected, to rescind, terminate, amend,
modify or suspend in any way prohibited under clause (i) above the Iridium LLC
Agreement, without the prior consent of the Administrative Agent (acting with
the approval of the Required Lenders). Iridium LLC shall provide the
Administrative Agent with prior written notice of each proposed modification,
supplement or waiver in respect of thereof not less than 10 Business Days prior
to the proposed effective date thereof (and the Administrative Agent shall
promptly provide copies thereof to each Lender). Promptly following the
effectiveness of each such modification, supplement or waiver, Iridium LLC shall
provide the Administrative Agent with a copy thereof as executed and delivered
by the parties thereto (and the Administrative Agent shall promptly provide a
copy thereof to each Lender).
(b) Iridium LLC will not approve, consent to or otherwise permit,
or take any other action to effect, the transfer of any membership interests of
Iridium LLC if such transfer would violate Section 5.01 of the Motorola Consent.
(c) Neither Iridium LLC nor any of its directors or officers will
exercise any rights under the Iridium LLC Agreement with respect to the Reserve
Capital Call Obligations unless directed so to do by the Administrative Agent
(acting upon the instructions of the Required Lenders). Upon payment by any
Iridium LLC Member of all or any part of the Reserve Capital Call Obligations
payable by such member to the Collateral Agent pursuant to Section 4.02 of the
Iridium LLC Agreement, such payment will constitute a capital contribution by
such member to Iridium LLC and Iridium LLC will be deemed to have made a capital
contribution in the same amount in the Company.
SECTION 4.16. Costs. If Iridium LLC shall, after the date hereof,
receive proceeds of any Iridium LLC Equity Issuance or any IWCL Equity Issuance,
in any case where the proceeds thereof are intended to be used to pay for or
reimburse Costs, Iridium LLC will make a capital contribution in the Company in
the amount of such net proceeds promptly following such issuance and receipt.
SECTION 4.17. Restrictive Agreements. Iridium LLC will not enter
into, incur or permit to exist any agreement or other arrangement that
prohibits, restricts or imposes any condition upon (a) the ability of the
Company or any of its Subsidiaries to create, incur or permit
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to exist any Lien upon any of its property or assets or to sell, transfer or
otherwise dispose of its assets, (b) the ability of any such Subsidiary to (i)
pay dividends or other distributions with respect to any shares of its equity
interests, (ii) make or repay loans or advances to the Company or any other
Subsidiary of the Company or (iii) Guarantee Indebtedness of the Company or any
such other Subsidiary under any of the Credit Documents or (c) the ability of
the Company or any such Subsidiary to enter into amendments, modifications,
supplements or waivers of any of the Credit Documents or Principal Project
Documents; provided that (i) the foregoing shall not apply to restrictions and
conditions imposed by any applicable Government Rule or by any Credit Document,
(ii) the foregoing shall not apply to (A) restrictions and conditions existing
on the date hereof in the Motorola Guaranteed Credit Agreement, the Senior Note
Indentures, the MOU Agreements or otherwise identified on Schedule IX to the
Credit Agreement (but shall apply to any amendment or modification thereof
expanding the scope of any such restriction or condition) or (B) any comparable
restrictions and conditions (not more restrictive than those referred to in
clause (A) above) contained in any agreement or instrument relating to
Indebtedness permitted under Section 7.01 of the Credit Agreement, (iii) the
foregoing shall not apply to customary restrictions and conditions contained in
agreements relating to the sale of a Subsidiary pending such sale, provided that
such restrictions and conditions apply only to the Subsidiary that is to be sold
and such sale is permitted hereunder, (iv) clause (a) of the foregoing shall not
apply to restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement if such restrictions or conditions
apply only to the property or assets securing such Indebtedness and (v) clause
(a) of the foregoing shall not apply to customary provisions in leases
restricting the assignment thereof.
ARTICLE V
REMEDIES
In furtherance of the grant of the pledge and security interest
pursuant to Section 3.01, Iridium LLC hereby agrees with the Secured Parties as
follows:
SECTION 5.01. Delivery and Other Perfection. Iridium LLC shall:
(a) if any of the shares, interests, securities, moneys or
property required to be pledged by Iridium LLC under clauses (a), (b) and
(c) of Section 3.01 are received by Iridium LLC, forthwith either (i)
transfer and deliver to the Collateral Agent such shares or securities so
received by Iridium LLC (together with the certificates for any such shares
and securities duly endorsed in blank or accompanied by undated stock
powers duly executed in blank), all of which thereafter shall be held by
the Collateral Agent, pursuant to the terms of this Agreement, as part of
the Collateral, (ii) with respect to any Member Collateral that is not
evidenced by a certificate, execute and deliver written instructions to the
issuer thereof to register the Lien created hereunder in such Member
Collateral in the registration books maintained by such issuer for such
purpose and cause Iridium LLC to execute and deliver to the Collateral
Agent a written confirmation to the effect that the Lien created hereunder
in such Member Collateral has been duly registered in such registration
books, all in form and substance satisfactory to the Collateral Agent or
(iii) take such other action as the Collateral Agent shall deem necessary
or appropriate
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to duly perfect the Lien created hereunder in such shares, interests,
securities, moneys or property in said clauses (a), (b) and (c);
(b) give, execute, deliver, file and/or record any financing
statement, notice, instrument, document, agreement or other papers that may
be necessary or desirable (in the judgment of the Collateral Agent) to
create, preserve, perfect or validate the security interest granted
pursuant hereto or to enable the Collateral Agent to exercise and enforce
its rights hereunder with respect to such pledge and security interest,
including, without limitation, causing any or all of the Collateral which
is represented by a certificate to be transferred of record into the name
of the Collateral Agent or its nominee (and the Collateral Agent agrees
that if any Collateral is transferred into its name or the name of its
nominee, the Collateral Agent will thereafter promptly give to Iridium LLC
copies of any notices and communications received by it with respect to the
Collateral pledged by Iridium LLC hereunder);
(c) keep full and accurate books and records relating to the
Collateral, and stamp or otherwise mark such books and records in such
manner as the Collateral Agent may reasonably require in order to reflect
the security interests granted by this Agreement; and
(d) permit representatives of the Collateral Agent, upon
reasonable notice, at any time during normal business hours to inspect and
make abstracts from its books and records pertaining to the Collateral, all
in such manner as the Collateral Agent may require.
SECTION 5.02. Other Financing Statements and Liens. Without the
prior written consent of the Collateral Agent, Iridium LLC shall not file or
suffer to be on file, or authorize or permit to be filed or to be on file, in
any jurisdiction, any financing statement or like instrument with respect to the
Collateral in which the Collateral Agent is not named as the sole secured party
for the benefit of the Secured Parties.
SECTION 5.03. Preservation of Rights. The Collateral Agent shall
not be required to take steps necessary to preserve any rights against prior
parties to any of the Collateral.
SECTION 5.04. Collateral.
(a) Iridium LLC will cause to be pledged hereunder at all times
100% of the aggregate ownership interests of the Company then outstanding.
(b) So long as no Event of Default shall have occurred and be
continuing, Iridium LLC shall have the right to exercise all voting, consensual
and other powers of ownership pertaining to the Member Collateral, provided that
Iridium LLC agrees that it will not vote the Collateral in any manner that is
inconsistent with the terms of this Agreement, the Credit Agreement or any other
instrument or agreement referred to herein or therein; and the Collateral Agent
shall execute and deliver to Iridium LLC or cause to be executed and delivered
to Iridium LLC all such proxies, powers of attorney, dividend and other orders,
and all such instruments,
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without recourse, as Iridium LLC may reasonably request for the purpose of
enabling Iridium LLC to exercise the rights and powers that they are entitled to
exercise pursuant to this paragraph (b).
(c) Except as permitted under, and subject to any conditions set
forth in, Section 7.07 of the Credit Agreement, no distributions, dividends or
other payments shall be paid by the Company to Iridium LLC in its capacity as a
member of the Company, and Iridium LLC shall not be entitled to receive and
retain any such distribution, dividends or other payments, in respect of the
Collateral; provided that nothing herein shall be construed to limit the payment
by the Company to Iridium LLC of the Iridium Management Expenses under, and as
defined in, the Management Services Agreement. In the event that,
notwithstanding the foregoing, Iridium LLC shall receive any such distribution,
dividend or other payment, Iridium LLC shall hold the same in trust for the
Collateral Agent and the other Secured Parties, segregated from other funds of
Iridium LLC and forthwith turn over the same to the Collateral Agent in the
exact form received by Iridium LLC for deposit into the appropriate Account
pursuant to the Depositary Agreement.
(d) Without limiting any other rights of the Collateral Agent under
this Agreement (but subject to the second paragraph of Section 5.05), upon and
during the continuance of any Event of Default, the Collateral Agent may (but
shall not be obligated to) make a demand for payment in respect of the Reserve
Capital Call Obligations in accordance with Section 4.02 of the Iridium LLC
Agreement, without notice to or consent from or any other action required to be
taken by Iridium LLC.
SECTION 5.05. Events of Default, Etc. During the period during
which an Event of Default shall have occurred and be continuing:
(a) the Collateral Agent shall have all of the rights and remedies
with respect to the Collateral of a secured party under the Uniform
Commercial Code (whether or not said Code is in effect in the jurisdiction
where the rights and remedies are asserted) and such additional rights and
remedies to which a secured party is entitled under the laws in effect in
any jurisdiction where any rights and remedies hereunder may be asserted,
including, without limitation, the right, to the maximum extent permitted
by law, to exercise all voting, consensual and other powers of ownership
pertaining to the Collateral as if the Collateral Agent were the sole and
absolute owner thereof (and Iridium LLC agrees to take all such action as
may be reasonably necessary to give effect to such right);
(b) the Collateral Agent in its discretion may, in its name or in
the name of Iridium LLC or otherwise, demand, sue for, collect or receive
any money or property at any time payable or receivable on account of or in
exchange for any of the Collateral, but shall be under no obligation to do
so; and
(c) the Collateral Agent may, upon 30 days' prior written notice
to Iridium LLC of the time and place, with respect to the Collateral or any
part thereof that shall then be or shall thereafter come into the
possession, custody or control of the Secured Parties or any of their
respective agents, sell, lease, assign or otherwise dispose of all or any
part of the Collateral, at such place or places as the Collateral Agent
deems best, and for cash or
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for credit or for future delivery, at public or private sale, without
demand of performance or notice of intention to effect any such disposition
or of the time or place thereof (except such notice as is required above or
by applicable statute and cannot be waived), and any Secured Party or
anyone else may be the purchaser, lessee, assignee or recipient of any or
all of the Collateral so disposed of at any public sale (or, to the extent
permitted by law, at any private sale) and thereafter hold the same
absolutely, free from any claim or right of whatsoever kind, including any
right or equity of redemption (statutory or otherwise), of Iridium LLC, any
such demand, notice and right or equity being hereby expressly waived and
released. The Collateral Agent may, without notice or publication, adjourn
any public or private sale or cause the same to be adjourned from time to
time by announcement at the time and place fixed for the sale, and such
sale may be made at any time or place to which the sale may be so
adjourned.
Notwithstanding anything herein or in any other Security
Document to the contrary, neither the Collateral Agent nor any of the other
Secured Parties shall sell, lease, assign or otherwise dispose, or cause the
sale, lease, assignment or other disposition, of all or any part of the
Collateral (other than the rights of Iridium LLC in respect of the Reserve
Capital Call Obligations) pursuant to this Agreement unless not less than 10
days prior thereto the Collateral Agent shall have made a demand (or caused a
demand to be made) in respect of the Reserve Capital Call Obligations in
accordance with Section 4.02 of the Iridium LLC Agreement, provided that (i)
nothing herein shall be construed to limit the rights of the Collateral Agent to
exercise any other right or remedies hereunder prior to any such sale, lease,
assignment or other disposition or from and after any event affecting any Credit
Party or Iridium LLC described in clause (i) or (j) of Section 9.01 of the
Credit Agreement and (ii) the requirement of this paragraph shall not apply if
the aggregate outstanding amount in respect of the Loans (net of any cash
balances in the Accounts) shall exceed the aggregate amount of the Reserve
Capital Call Obligations.
The proceeds of each collection, sale or other disposition under
this Section shall be applied in accordance with Section 5.08.
Iridium LLC recognizes that, by reason of certain prohibitions
contained in the Securities Act of 1933, as amended, and applicable state
securities laws, the Collateral Agent may be compelled, with respect to any sale
of all or any part of the Collateral, to limit purchasers to those who will
agree, among other things, to acquire the Collateral for their own account, for
investment and not with a view to the distribution or resale thereof. Iridium
LLC acknowledges that any such private sales may be at prices and on terms less
favorable to the Collateral Agent than those obtainable through a public sale
without such restrictions, and, notwithstanding such circumstances, agrees that
any such private sale shall be deemed to have been made in a commercially
reasonable manner and that the Collateral Agent shall have no obligation to
engage in public sales and no obligation to delay the sale of any Collateral for
the period of time necessary to permit Iridium LLC or the issuer of such
Collateral to register it for public sale.
SECTION 5.06. Removals, Etc. Without at least 30 days' prior
written notice to the Collateral Agent, Iridium LLC shall not (i) maintain any
of its books and records with respect to the Collateral at any office or
maintain its principal place of business at any place other than at
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the address indicated beneath its signature hereto or (ii) change its corporate
name, or the name under which it does business, from the name shown on the
signature pages hereto.
SECTION 5.07. Private Sale. No Secured Party shall incur any
liability as a result of the sale of the Collateral, or any part thereof, at any
private sale pursuant to Section 5.05 conducted in a commercially reasonable
manner. Iridium LLC hereby waives any claims against the Secured Parties arising
by reason of the fact that the price at which the Collateral may have been sold
at such a private sale was less than the price that might have been obtained at
a public sale or was less than the aggregate amount of the Secured Obligations,
even if the Collateral Agent accepts the first offer received and does not offer
Collateral to more than one offeree.
SECTION 5.08. Application of Proceeds. Except as otherwise herein
expressly provided, the proceeds of any collection, sale or other realization of
all or any part of the Collateral pursuant hereto, and any other cash at the
time held by the Collateral Agent under this Agreement, shall be applied by the
Collateral Agent:
First, to the payment of the costs and expenses of such
collection, sale or other realization, including reasonable out-of-pocket
costs and expenses of the Collateral Agent and the reasonable fees and
expenses of its agents and counsel, and all reasonable expenses incurred
and advances made by the Collateral Agent in connection therewith;
Next, to the payment in full of the Secured Obligations, in each
case equally and ratably in accordance with the respective amounts thereof
then due and owing or as the Lenders holding the same may otherwise agree;
and
Finally, to the payment to Iridium LLC, or its successors or
assigns, or as a court of competent jurisdiction may direct, of any surplus
then remaining.
As used in this Article V, "proceeds" of Collateral shall mean
cash, securities and other property realized in respect of, and distributions in
kind of, the Collateral, including any thereof received under any
reorganization, liquidation or adjustment of debt of Iridium LLC or any issuer
of or obligor on any of the Collateral.
SECTION 5.09. Attorney-in-Fact. Without limiting any rights or
powers granted by this Agreement to the Collateral Agent while no Event of
Default has occurred and is continuing, upon the occurrence and during the
continuance of any Event of Default the Collateral Agent is hereby appointed the
attorney-in-fact of Iridium LLC for the purpose of carrying out the provisions
hereof and taking any action and executing any instruments that the Collateral
Agent may reasonably deem necessary or advisable to accomplish the purposes
hereof, which appointment as attorney-in-fact is irrevocable and coupled with an
interest. Without limiting the generality of the foregoing, so long as the
Collateral Agent shall be entitled under this Article to make collections in
respect of the Collateral, the Collateral Agent shall have the right and power
to receive, endorse and collect all checks made payable to the order of Iridium
LLC representing any dividend, payment or other distribution in respect of the
Collateral or any part thereof and to give full discharge for the same.
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SECTION 5.10. Perfection. Prior to or concurrently with the
execution and delivery of this Agreement, Iridium LLC shall take such action,
including without limitation filing UCC financing statements, establishing
control arrangements (within the meaning of Article 8 of the UCC) and delivering
to the Collateral Agent any certificates representing the Collateral
(accompanied by undated stock or transfer powers duly executed in blank) as the
Collateral Agent may reasonably request to perfect the security interests
granted pursuant to Section 3.01.
SECTION 5.11. Termination. When all Secured Obligations shall have
been paid in full and the Commitments of the Lenders under the Credit Agreement
shall have expired or been terminated, this Agreement shall terminate and all
rights to the Collateral shall revert to Iridium LLC, and the Collateral Agent
shall forthwith cause to be assigned, transferred and delivered, against receipt
but without any recourse, warranty or representation whatsoever, any remaining
Collateral and money received in respect thereof, to or on the order of Iridium
LLC.
SECTION 5.12. Further Assurances. Iridium LLC agrees that, from
time to time upon the written request of the Collateral Agent, Iridium LLC will
execute and deliver such further documents and do such other acts and things as
the Collateral Agent may reasonably request in order fully to effect the
purposes of this Agreement.
ARTICLE VI
CONSENT AND AGREEMENT
Iridium LLC hereby acknowledges and agrees:
SECTION 6.01. Iridium LLC hereby acknowledges notice and receipt
of the Security Agreement and consents to the assignment by the Company of all
its rights in and under the Management Services Agreement pursuant to the
Security Agreement.
SECTION 6.02. In connection with any exercise by the Collateral
Agent of any of its remedies under the Security Agreement, the Collateral Agent
shall be entitled to exercise any and all rights of the Company under the
Management Services Agreement in accordance with its terms, and Iridium LLC
shall comply in all respects with such exercise. Without limiting the foregoing,
in connection with the exercise by the Collateral Agent of such remedies, the
Collateral Agent shall have the full right and power to enforce directly against
Iridium LLC all obligations of Iridium LLC owing to the Company under the
Management Services Agreement and otherwise to exercise all remedies of the
Company thereunder and to make all demands and give all notices and make all
requests required or permitted to be made by the Company under the Management
Services Agreement. The Collateral Agent shall have the right, but not the
obligation, to cure all defaults of the Company and to pay all sums owing by the
Company under the Management Services Agreement in accordance with this Article.
SECTION 6.03. Iridium LLC will not, without the prior written
consent of the Collateral Agent, (i) cancel or terminate, or suspend performance
under, or exercise any right to consent to or accept any cancellation,
termination or suspension of, the Management Services
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Agreement, unless prior thereto Iridium LLC shall have delivered to the
Collateral Agent written notice stating that it intends to take such action on a
date not less than 90 days after the date of such notice, specifying the nature
of the default or other event under the Management Services Agreement entitling
Iridium LLC to take such action (and, in the case of a payment default by the
Company, specifying the amount thereof) and permitting the Collateral Agent to
cure such payment default by making a payment equal to the amount in default or
by performing or causing to be performed any other obligation in default, (ii)
transfer, sell, assign, delegate or otherwise dispose of any part of its
interests in the Management Services Agreement, or (iii) petition, request or
take any other legal or administrative action which seeks, or may reasonably be
expected, to rescind, terminate or suspend or amend or modify the Management
Services Agreement or any part thereof in any manner prohibited by clause (i) or
(ii) above. In furtherance of clause (i) of the immediately preceding sentence,
Iridium LLC agrees that, notwithstanding anything contained in the Management
Services Agreement to the contrary, upon the occurrence of a default by the
Company under such Management Services Agreement entitling Iridium LLC to cancel
or terminate such Management Services Agreement or to suspend performance
thereunder, Iridium LLC will not take any action to cancel or terminate, or
suspend performance under, such Management Services Agreement if, within a
90-day period after the date on which the Collateral Agent shall have received
notice of such default from Iridium LLC, the Collateral Agent commences steps to
cure such default and/or otherwise to institute enforcement proceedings to
acquire the Company's interest in the Management Services Agreement or the
Iridium Business and thereafter the Collateral Agent diligently pursues such
steps or proceedings and all payment defaults of the Company under the
Management Services Agreement have been cured within such 90-day period.
Effective upon any transfer of the Company's interest in the Management Services
Agreement to any other Person, Iridium LLC will grant the relevant transferee a
reasonable period of time to cure such default (but, in no event with respect to
any payment default, exceeding a maximum of 90 days after receipt of notice of
such payment default by the Collateral Agent, as contemplated above). Except as
provided in Section 6.05, no curing or attempt to cure any of the Company's
defaults under the Management Services Agreement shall be construed as an
assumption by the Collateral Agent or any other Secured Party of any covenants,
agreements or obligations of the Company under the Management Services Agreement
and neither the Collateral Agent nor any other Secured Party shall have any
obligation to Iridium LLC for the performance of any obligation under the
Management Services Agreement. In connection with any cure pursuant to this
Section of the Company's default(s) under the Management Services Agreement or
any assumption by any Person of the Company's liabilities thereunder, only those
obligations and liabilities arising expressly under the Management Services
Agreement shall be required to be cured or assumed, as the case may be.
Notwithstanding anything in this Agreement to the contrary, no provision of this
Agreement shall be intended to restrict in any way any merger or consolidation
to which Iridium LLC is a party or the sale of all or substantially all of the
assets of Iridium LLC and its Subsidiaries, provided that, in connection with
any such transaction, if Iridium LLC is not the surviving entity of such
transaction, the surviving entity or purchaser, as the case may be, expressly
assumes in writing the obligations of Iridium LLC under the Management Services
Agreement. Notwithstanding anything herein to the contrary, the restrictions
under this Article shall not apply to any of the arrangements between Iridium
LLC and IWCL as set forth in the Management Services Agreement.
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SECTION 6.04. Iridium LLC shall deliver to the Administrative
Agent at the address provided for in Section 11.01 of the Credit Agreement, or
at such other address as the Administrative Agent may designate in writing from
time to time to Iridium LLC, promptly following the delivery thereof to the
Company, a copy of each material notice from Iridium LLC to the Company under
the Management Services Agreement other than periodic demands for payment not
then overdue. Promptly following its receipt thereof, Iridium LLC will deliver
to the Administrative Agent at the address specified above a copy of each
material notice from the Company to Iridium LLC under the Management Services
Agreement.
SECTION 6.05. Iridium LLC agrees that, in connection with the
exercise by the Collateral Agent of its remedies under the Security Agreement
with respect to the Management Services Agreement, Iridium LLC shall recognize
the Collateral Agent as the Company for purposes of the Management Services
Agreement in accordance with this Agreement. In the event that the Collateral
Agent succeeds to the Company's interests under the Management Services
Agreement in accordance with the Security Agreement, the Collateral Agent shall
assume liability for all of the Company's obligations under the Management
Services Agreement, provided, however, that such liability shall not include any
liability for claims of Iridium LLC against the Company arising from the
Company's failure to perform during the period prior to the Collateral Agent's
succession to the Company's interests under the Management Services Agreement
other than the payments obligations of the Company expressly provided for in the
Management Services Agreement. Except as otherwise set forth in the immediately
preceding sentence, none of the Secured Parties shall be liable for the
performance or observance or any of the obligations or duties of the Company
under any of the Management Services Agreement, nor shall the assignment of the
Management Services Agreement by the Company to the Collateral Agent pursuant to
the Security Agreement give rise to any duties or obligations whatsoever on the
part of any of the Secured Parties owing to Iridium LLC. If the Collateral Agent
succeeds to the Company's interests under the Management Services Agreement
pursuant to the Security Agreement, Iridium LLC and the Collateral Agent shall
negotiate in good faith an equitable adjustment to the amounts payable
thereunder to compensate Iridium LLC for any additional costs reasonably
incurred by Iridium LLC following the failure of the Company to perform its
obligations that resulted in the enforcement by the Collateral Agent of its
remedies under the Security Agreement until the date on which the Collateral
Agent shall have assumed the obligations of the Company under the Management
Services Agreement. Notwithstanding the foregoing, Iridium LLC shall not be
relieved of its obligations to perform under the Management Services Agreement
as a result of the parties' failure to agree upon an equitable adjustment to the
amounts payable thereunder.
SECTION 6.06. In the event that (i) the Management Services
Agreement is rejected by a trustee, liquidator, debtor-in-possession or similar
entity or person in any bankruptcy, insolvency or other similar proceeding
involving the Company or (ii) the Management Services Agreement is terminated as
a result of any bankruptcy, insolvency or similar proceeding involving the
Company and, if within 90 days after such rejection, the Collateral Agent shall
so request and shall certify in writing to Iridium LLC that it intends to
perform the obligations of the Company as and to the extent required under the
Management Services Agreement (as if it had not been rejected or terminated, but
otherwise only to the extent such obligations would be undertaken had such
person or entity succeeded to the Company
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thereunder pursuant to Section 6.07, Iridium LLC will execute and deliver to the
Collateral Agent a new agreement amending or replacing the original affected
Management Services Agreement which shall be for the balance of the remaining
term under such affected Management Services Agreement before giving effect to
such rejection or termination and shall contain the same conditions, agreements,
terms, provisions and limitations as such affected Management Services Agreement
(except for any requirements which have been fulfilled by the Company and
Iridium LLC prior to such rejection or termination or which are not required to
be undertaken by such person or entity). If the Collateral Agent and Iridium LLC
enter into such a new agreement in accordance with this Section, Iridium LLC and
the Collateral Agent shall negotiate in good faith an equitable adjustment to
the amounts payable thereunder to compensate Iridium LLC for any additional
costs reasonably incurred by Iridium LLC during the period from and including
the date such bankruptcy, insolvency or similar proceeding was commenced to and
including the date on which the Collateral Agent shall certify in writing that
it intends to perform the obligations of the Company with respect to such new
agreement. Notwithstanding the foregoing provisions, Iridium LLC shall not be
relieved of its obligations to perform under such new agreement as result of the
parties' failure to agree upon such an equitable adjustment. References in this
Agreement to a "Management Services Agreement" shall be deemed also to refer to
the new Management Services Agreement in replacement thereof.
SECTION 6.07. In connection with the exercise by the Collateral
Agent of its remedies under the Security Agreement, the Collateral Agent may
assign its rights and interests and the rights and interests of the Company
under the Management Services Agreement to any other Person, provided that such
Person shall assume all of the obligations of the Company under the Management
Services Agreement(s) and shall have obtained all Government Approvals (if any)
necessary to perform such obligations. Upon such assignment and assumption, the
Collateral Agent shall be relieved of all obligations (if any) under the
Management Services Agreement(s) arising after such assignment and assumption.
SECTION 6.08. It is acknowledged and agreed that the Collateral
Agent may employ agents and attorneys-in-fact in exercising its remedies under
the Security Agreement, and in that connection may designate another entity to
take action on behalf of the Collateral Agent including, but not limited to, the
enforcement of and/or acquisition of the Company's rights in the Management
Services Agreement or otherwise in respect of the Iridium Business. It is
further acknowledged and agreed that in connection with the exercise by the
Collateral Agent of such remedies, the Collateral Agent may cause the Company's
rights in any or all of the Management Services Agreement (and/or other assets
associated with the Iridium Business) to be transferred or assigned to a third
party pursuant to the Security Agreement (a "transferee"). The provisions of
this Article are intended to benefit the Collateral Agent, its agents,
attorneys-in-fact and designees (collectively, the "designees") and each
transferee. Accordingly, unless the context otherwise requires, references to
"Collateral Agent" or "Administrative Agent" in this Article shall be deemed to
include references to designees and transferees thereof permitted pursuant to
the Security Agreement (regardless of whether so expressly provided herein), and
all actions permitted to be taken by the Collateral Agent or the Administrative
Agent, as the case may be, under this Agreement may be taken by any such
designee or transferee, as appropriate.
Parent Security Agreement
<PAGE> 210
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ARTICLE VII
MISCELLANEOUS
SECTION 7.01. No Waiver. No failure on the part of the Collateral
Agent or any other Secured Party to exercise, and no course of dealing with
respect to, and no delay in exercising, any right, power or remedy hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise by
the Collateral Agent or any other Secured Party of any right, power or remedy
hereunder preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. The remedies herein are cumulative and are not
exclusive of any remedies provided by law.
SECTION 7.02. Notices. All notices, requests, consents and demands
hereunder shall be in writing and telecopied or delivered to the intended
recipient at the "Address for Notices" specified beneath its name on the
signature pages hereof or, as to any party, at such other address as shall be
designated by such party in a notice to each other party. Except as otherwise
provided in this Agreement, all such communications shall be deemed to have been
duly given when transmitted by telecopier or personally delivered or, in the
case of a mailed notice, upon receipt, in each case given or addressed as
aforesaid.
SECTION 7.03. Expenses. Iridium LLC agrees to reimburse each of
the Lenders and the Collateral Agent for all reasonable costs and expenses of
the Lenders and the Collateral Agent (including, without limitation, the
reasonable fees and expenses of legal counsel) in connection with (a) any Event
of Default and any enforcement or collection proceeding resulting therefrom,
including, without limitation, all manner of participation in or other
involvement with (i) performance by the Collateral Agent of any obligations of
Iridium LLC in respect of the Collateral that Iridium LLC have failed or refused
to perform, (ii) bankruptcy, insolvency, receivership, foreclosure, winding up
or liquidation proceedings, or any actual or attempted sale, or any exchange,
enforcement, collection, compromise or settlement in respect of any of the
Collateral, and for the care of the Collateral and defending or asserting rights
and claims of the Collateral Agent in respect thereof, by litigation or
otherwise, (iii) judicial or regulatory proceedings and (iv) workout,
restructuring or other negotiations or proceedings (whether or not the workout,
restructuring or transaction contemplated thereby is consummated) and (b) the
enforcement of this Section, and all such costs and expenses shall be Secured
Obligations entitled to the benefits of the collateral security provided
pursuant to Section 3.01.
SECTION 7.04. Amendments, Etc. The terms of this Agreement may be
waived, altered or amended only by an instrument in writing duly executed by
Iridium LLC and the Collateral Agent. Any such amendment or waiver shall be
binding upon the Collateral Agent, each other Secured Party and Iridium LLC.
SECTION 7.05. Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the respective successors and assigns
of Iridium LLC, the Collateral Agent and each other Secured Party, provided,
however, that Iridium LLC shall not assign or transfer its rights hereunder
without the prior written consent of the Collateral Agent.
Parent Security Agreement
<PAGE> 211
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SECTION 7.06. Captions. The caption and section headings used
herein are for convenience of reference only, are not part of this Agreement and
shall not affect the construction of, or be taken into consideration in
interpreting, this Agreement.
SECTION 7.07. Counterparts. This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract.
SECTION 7.08. Governing Law; Jurisdiction; Consent to Service of
Process.
(a) This Agreement shall be construed in accordance with and
governed by the law of the State of New York.
(b) Iridium LLC hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of the Supreme
Court of the State of New York sitting in New York County and of the United
States District Court of the Southern District of New York, and any appellate
court from any thereof, in any action or proceeding arising out of or relating
to this Agreement, or for recognition or enforcement of any judgment, and each
of the parties hereto hereby irrevocably and unconditionally agrees that all
claims in respect of any such action or proceeding may be heard and determined
in such New York State or, to the extent permitted by law, in such Federal
court. Each of the parties hereto agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that the Collateral Agent or
any other Secured Party may otherwise have to bring any action or proceeding
relating to this Agreement against Iridium LLC or its properties in the courts
of any jurisdiction.
(c) Iridium LLC hereby irrevocably appoints CT Corporation (the
"Process Agent") with an office on the date hereof at 1633 Broadway New York,
New York 10019 as its agent to receive on behalf of it and its property service
of copies of the summons and complaint and any other process which may be served
in any such suit, action or proceeding. Such service may be made by mailing or
delivering a copy of such process to Iridium LLC, in care of the Process Agent
at the Process Agent's above address and Iridium LLC hereby irrevocably
authorizes and directs the Process Agent to receive such service on its behalf.
The Administrative Agent and each Lender agree to mail to Iridium LLC at its
address provided under Section 7.02 a copy of any summons, complaint, or other
process mailed or delivered by it to Iridium LLC in care of the Process Agent.
As an alternate method of service, Iridium LLC also irrevocably consents to the
service of any and all process in any such suit, action or proceeding by mailing
of copies of such process to it at its address provided under Section 7.02. All
mailings under this Section shall be by certified mail, return receipt
requested. Nothing in this Agreement will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.
(d) Iridium LLC hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement
Parent Security Agreement
<PAGE> 212
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in any court referred to in paragraph (b) of this Section. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.
(e) To the extent that Iridium LLC may be or become entitled, in
any jurisdiction in which judicial proceedings may at any time be commenced with
respect to this Agreement, to claim for itself or its property or revenues any
immunity from suit, court jurisdiction, attachment prior to judgment, attachment
in aid of execution of a judgment, execution of a judgment or from any other
legal process or remedy relating to its obligations under this Agreement and to
the extent that in any such jurisdiction there may be attributed such an
immunity (whether or not claimed), Iridium LLC hereby irrevocably agrees not to
claim and hereby irrevocably waives such immunity to the fullest extent
permitted by the laws of such jurisdiction.
SECTION 7.09. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 7.10. No Third Party Beneficiaries. The agreements of the
parties hereto are solely for the benefit of Iridium LLC, the Collateral Agent
and the other Secured Parties, and no other Person shall have any rights
hereunder.
SECTION 7.11. Agents and Attorneys-in-Fact. The Collateral Agent
may employ agents and attorneys-in-fact in connection herewith and shall not be
responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it in good faith.
SECTION 7.12. Severability. Any provision of this Agreement held
to be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
Parent Security Agreement
<PAGE> 213
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SECTION 7.13. Security Interest Absolute. The rights and remedies
of the Collateral Agent hereunder, the Liens created hereby and the obligations
of Iridium LLC hereunder are absolute, irrevocable and unconditional,
irrespective of:
(a) the validity or enforceability of any of the Secured
Obligations, any LLC Agreement, any Credit Document or any other agreement
or instrument relating thereto (other than this Agreement);
(b) any amendment to, waiver of, consent to or departure from, or
failure to exercise any right, remedy, power or privileges under or in
respect of, any of the Secured Obligations, any LLC Agreement, any Credit
Document or any other agreement or instrument relating thereto (other than
this Agreement);
(c) the acceleration of the maturity of any of the Secured
Obligations or any other modification of the time of payment thereof;
(d) any substitution, release or exchange of any other security
for or guarantee of any of the Secured Obligations or the failure to
create, preserve, validate, perfect or protect any other Lien granted to,
or purported to be granted to, or in favor of, the Collateral Agent or any
other Secured Party; or
(e) any other event or circumstance whatsoever which might
otherwise constitute a legal or equitable discharge of a surety or a
guarantor, it being the intent of this Section that the obligations of
Iridium LLC hereunder shall be absolute, irrevocable and unconditional
under any and all circumstances.
SECTION 7.14. Subrogation. Iridium LLC shall not exercise, and
hereby irrevocably waives, any claim, right or remedy that it may now have or
may hereafter acquire against the Company arising under or in connection with
this Agreement, including, without limitation, any claim, right or remedy of
subrogation, contribution, reimbursement, exoneration, indemnification or
participation arising under contract, by Government Rule or otherwise in any
claim, right or remedy of the Collateral Agent or any other Secured Party
against the Company or any other Person or any Collateral which the Collateral
Agent or any other Secured Party may now have or may hereafter acquire until
such time as all of the Secured Obligations have been paid in full. If,
notwithstanding the preceding sentence, any amount shall be paid to Iridium LLC
on account of such claim, right or remedy at any time when any of the Secured
Obligations shall not have been paid in full, such amount shall be held by
Iridium LLC in trust for the Collateral Agent and the other Secured Parties,
segregated from other funds of Iridium LLC, and be turned over to the Collateral
Agent in the exact form received by Iridium LLC (duly endorsed by Iridium LLC to
the Collateral Agent, if required), to be applied against the Secured
Obligations, whether matured or unmatured, in accordance with this Agreement.
SECTION 7.15. Reinstatement. This Agreement and the Lien created
hereunder shall automatically be reinstated if and to the extent that for any
reason any payment by or on behalf of the Company in respect of the Secured
Obligations is rescinded or must otherwise be restored by any holder of the
Secured Obligations, whether as a result of any proceedings in
Parent Security Agreement
<PAGE> 214
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bankruptcy or reorganization or otherwise, and Iridium LLC shall indemnify the
Collateral Agent and each other Secured Party on demand for all reasonable costs
and expenses (including, without limitation, reasonable fees of counsel)
incurred by the Collateral Agent or such other Secured Party in connection with
such rescission or restoration.
SECTION 7.16. FCC Approval. Notwithstanding any other provision of
this Agreement, from and after the transfer of the FCC License to the Company or
any of its Subsidiaries pursuant to Section 18.H of the Space System Contract,
no action shall be taken hereunder by the Collateral Agent or any other Secured
Party with respect to any of the membership interests of the Company that would
constitute or result in any assignment of the FCC License or any change of
control of the holder of the FCC License, if, under then existing applicable
law, regulations and FCC policies, such assignment or change of control would
require the prior approval of the FCC. Iridium LLC agrees to take, at its
expense, any action that the Collateral Agent may reasonably request in order to
obtain from the FCC such approval as may be necessary (a) to enable the
Collateral Agent to exercise and enjoy the full rights and benefits granted to
the Collateral Agent by this Agreement and (b) for any action or transaction
contemplated by this Agreement for which such approval is or shall be required
by law, and specifically, without limitation, upon request by the Collateral
Agent, to prepare, sign and file with the FCC the assignor's or transferor's
portion of any application or applications for consent to the assignment of any
license or transfer of control necessary or appropriate under the FCC's rules,
regulations and policies, or for approval of any sale of the membership
interests of the Company provided by this Agreement by or on behalf of the
Collateral Agent or any assumption by the Collateral Agent of voting rights
relating thereto effected in accordance with the terms hereof.
Parent Security Agreement
<PAGE> 215
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IN WITNESS WHEREOF, the parties hereto have caused this Pledge and
Security Agreement to be duly executed and delivered as of the day and year
first above written.
PLEDGOR
IRIDIUM LLC
By
------------------------
Name:
Title:
Address for Notices:
Iridium LLC
1575 Eye Street, N.W.
Suite 800
Washington, D.C. 20005
Telecopier No.: 202-408-3761
Attention: General Counsel
Parent Security Agreement
<PAGE> 216
COLLATERAL AGENT
THE CHASE MANHATTAN BANK,
as Collateral Agent
By
------------------------
Name:
Title:
Address for Notices:
The Chase Manhattan Bank
Loan and Agency Services Group
1 Chase Manhattan Plaza
8th Floor
New York, New York 10081
Attention: Winslowe Ogbourne
Telecopier: (212) 552-5700
with a copy to:
The Chase Manhattan Bank
270 Park Avenue
New York, New York 10017
Attention: Ronald Lepes/William Rottino
Telecopy No.: (212) 270-2740/(212) 270-1724
Parent Security Agreement
<PAGE> 217
ANNEX 1
Membership Interests
[See Section 2.11(b) and (c)]
<TABLE>
<CAPTION>
Type of Certificate
Membership Number of No(s).
Interests Units (if any)
--------- ----- --------
<S> <C> <C>
ILLC Membership 100% 1
Interests in IOLLC
</TABLE>
Annex 1 to Parent Security Agreement
<PAGE> 218
SCHEDULE I
Iridium LLC Members
INTERESTS
<TABLE>
<CAPTION>
Series M
Convertible Series A Series B Series C
Class 1 Class 2 Class 2 Class 2 Class 2
Name and Business Address Interests Interests Interests Interests Interests
- ------------------------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
AIG Asian Infrastructure Fund, L.P. 945,898 -- -- -- --
c/o L. Michael Murphy
American International Building
29 Richmond Road
Pembroke, Bermuda HM08
AIG Investment Corporation (Asia) Ltd. 689,194 -- -- -- --
c/o Cesar Zalamea
NatWest Tower, 31st Floor
Times Square
1 Matheson St
Causeway Bay, Hong Kong
American International Underwriters Overseas, Ltd. 945,898 -- -- -- --
c/o L. Michael Murphy
American International Building
29 Richmond Road
Pembroke, Bermuda HM08
BCE Mobile -- -- 11,129.8 -- --
20 Carlson Court
Etobioke, Ontario
Canada M9W 6V4
IAC Sale Sub, Ltd. 1,579,888 -- -- -- --
c/o Hume & Johnson P.A.
Suite 301
1401 University Drive
Coral Springs, Florida 33071-8909
IAC Swap Sub, Ltd. 879,233 -- -- -- --
c/o Hume & Johnson P.A.
Suite 301
1401 University Drive
Coral Springs, Florida 33071-8909
Irid Investor Holdings Ltd. 1,612,500 -- -- -- --
c/o L. Michael Murphy
American International Buildings
29 Richmond Road
Pembroke, Bermuda HM08
Iridium Africa Corporation . 4,500,000 -- -- -- --
c/o Mawarid Services (UK) Ltd.
Berkeley Square House, 6th Floor
Berkeley Square
London W1X5PN England
</TABLE>
Schedule I to Parent Security Agreement
<PAGE> 219
-2-
<TABLE>
<S> <C> <C> <C> <C> <C>
Iridium Andes-Caribe 2,447,304 -- -- -- --
Ed. Maploca II - Piso 4
Av. Principal de Los Cortijos de Lourdes
Caracas, Venezuela
Iridium Brasil S/A 2,824,755 -- -- -- --
CX. Postal 7060
80021 - Curitiba - PR -
Brazil
Iridium Canada, Inc. 5,250,000 -- -- -- --
c/o BCE Mobile
20 Carlson Court
Etobioke, Ontario
Canada M9W 6V4
Iridium China (Hong Kong) Ltd. 5,250,000 -- -- -- --
12/F Conic Investment Building
13 Hok Yuen Street
Hunghom, Kowloon, Hong Kong
Iridium India Telecom Limited 5,250,000 -- -- -- --
c/o Industrial Development Bank of India
IDBI Tower, Cuffe Parade
Bombay -- 400 005 India
Iridium Italia 5,550,000 -- -- -- --
c/o Telecom Italia SpA
Via Flaminia 189
00196 Rome Italy
Iridium Middle East Corporation 6,000,000 -- -- -- --
c/o Carlyle International
1001 Pennsylvania Ave., N.W.
Washington, D.C. 20004
- -or-
c/o Mawarid Services (UK) Ltd.
Berkeley Square House, 6th Floor
Berkeley Square
London W1X 5PN England
Iridium World Communications Ltd. 12,093,969 -- -- -- --
1575 Eye Street, NW
Washington, D.C. 20005
Khrunichev State Research and 6,133,125 -- -- -- --
Production Space Center
18, Novozavodskaja St.
Moscow 121309
Russian Federation
Lockheed Martin Corporation 1,500,000 -- -- -- --
1111 Lockheed Way
ORGN 50-01, Bldg. 104
Sunnyvale, CA 94089
</TABLE>
Schedule I to Parent Security Agreement
<PAGE> 220
-3-
<TABLE>
<S> <C> <C> <C> <C> <C>
Motorola, Inc. 24,477,000 -- -- 1 75
1303 East Algonquin Rd.
Schaumburg, IL 60196
Nippon Iridium (Bermuda) Limited 15,750,000 -- -- -- --
c/o NIPPON IRIDIUM CORPORATION
Ichibancho FS Building 8
Ichibancho Chiyoda-ku
Tokyo 102 Japan
Pacific Asia Communications Ltd. 5,250,000 -- -- -- --
c/o Pacific Iridium Telecommunications Co., Ltd.
19/F, 169 Sec.4, Jen-A: Road
Taipei 106, Taiwan, R.O.C.
Raytheon Company 900,000 -- -- -- --
1001 Boston Post Road
Marlboro, MA 01752
SK Telecom 5,250,000 -- 16,381.7 -- --
6th Floor, Namsan Green Building 267
5-ga, Namdaemunno
Chung-gue, Seoul Korea
South Pacific Iridium Holdings Limited 1,169,010 -- -- -- --
c/o Harney Westwood & Riegels
Road Town, Tortola
British Virgin Islands
South Pacific Iridium Holdings Limited II 2,137,500 -- -- -- --
c/o Harney Westwood & Riegels
Craigmuir Chambers, P. O. Box 71
Road Town, Tortola
British Virgin Islands
Sprint Iridium, Inc. 5,250,000 -- 16,381.6 -- --
2330 Shawnee Mission Parkway
Westwood, KS 66205
Thai Satellite Telecommunications Co., Ltd. 5,250,000 -- -- -- --
c/o United Communication
Industry Co. Ltd.
20 Phahonyothin Rd.
Soi 11 Phayathai
Bangkok 10400, Thailand
VEBACOM Holdings, Inc. 12,427,875 -- -- -- --
c/o VEBACOM GmbH
Am Bonneshof 35
D-40474 Dusseldorf Germany
TOTAL 141,313,149 -- 87,786.2 1 75
</TABLE>
Schedule I to Parent Security Agreement
<PAGE> 221
EXHIBIT D
[FORM OF SUBSIDIARY GUARANTEE AGREEMENT]
SUBSIDIARY GUARANTEE AGREEMENT
GUARANTEE AGREEMENT dated as of ____________ __, 199_ between:
each of the entities identified under the caption "SUBSIDIARY GUARANTOR" on the
signature pages hereto or which shall become a Subsidiary Guarantor for purposes
hereof pursuant to Section 6.11 of the Credit Agreement referred to below (each
individually, a "Subsidiary Guarantor" and, collectively, the "Subsidiary
Guarantors"); and THE CHASE MANHATTAN BANK, as administrative agent for the
lenders party to the Credit Agreement referred to below (in such capacity,
together with its successors in such capacity, the "Administrative Agent").
Iridium Operating LLC, a Delaware limited liability company (the
"Company"), the lenders named therein (the "Lenders"), the Administrative Agent,
The Chase Manhattan Bank, as Collateral Agent, and Barclays Bank PLC, as
Documentation Agent are parties to a Senior Secured Credit Agreement dated as of
December 23, 1998 (as modified, supplemented or otherwise modified and in effect
from time to time, the "Credit Agreement"), providing, subject to the terms and
conditions thereof, for loans to be made by the Lenders to the Company in an
aggregate principal amount not exceeding $800,000,000.
To induce the Lenders to enter into the Credit Agreement and to
extend credit thereunder, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, each Subsidiary
Guarantor has agreed to guarantee the Guaranteed Obligations (as hereinafter
defined). Accordingly, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms. Capitalized terms used but not
defined herein shall have their respective defined meanings in the Credit
Agreement.
SECTION 1.02. Terms Generally. The definitions of terms herein
shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
The word "will" shall be construed to have the same meaning and effect as the
word "shall". Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified, including an amendment
and restatement thereof, but subject to any restrictions on such amendments,
supplements or modifications set forth herein, (b) any reference herein to any
Person shall be construed to include such Person's successors and assigns or, in
the case of any Governmental Authority, any entity succeeding to any or all of
the functions of such Governmental Authority, (c) the words "herein", "hereof"
and "hereunder", and
Subsidiary Guarantee Agreement
<PAGE> 222
-2-
words of similar import, shall be construed to refer to this Agreement in its
entirety and not to any particular provision hereof, (d) all references herein
to Articles and Sections shall be construed to refer to Articles and Sections of
this Agreement and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights.
ARTICLE II
GUARANTEE
SECTION 2.01. The Guarantee. The Subsidiary Guarantors hereby
jointly and severally guarantee to each Lender and each Agent and their
respective successors and assigns the prompt payment in full when due (whether
at stated maturity, by acceleration or otherwise) of the principal of and
interest on the Loans made by the Lenders to the Company and all other amounts
from time to time owing to the Lenders or the Agents by the Company under the
Credit Agreement and the other Credit Document, in each case strictly in
accordance with the terms thereof (such obligations being herein collectively
called the "Guaranteed Obligations"). The Subsidiary Guarantors hereby further
jointly and severally agree that if the Company shall fail to pay in full when
due (whether at stated maturity, by acceleration or otherwise) any of the
Guaranteed Obligations, the Subsidiary Guarantors will promptly pay the same,
without any demand or notice whatsoever, and that in the case of any extension
of time of payment or renewal of any of the Guaranteed Obligations, the same
will be promptly paid in full when due (whether at extended maturity, by
acceleration or otherwise) in accordance with the terms of such extension or
renewal.
SECTION 2.02. Obligations Unconditional. The obligations of the
Subsidiary Guarantors under Section 2.01 are absolute and unconditional, joint
and several, irrespective of the value, genuineness, validity, regularity or
enforceability of the Credit Agreement, any other Credit Document or any other
agreement or instrument referred to herein or therein, or any substitution,
release or exchange of any other guarantee of or security for any of the
Guaranteed Obligations, and, to the fullest extent permitted by applicable law,
irrespective of any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor,
it being the intent of this Article II that the obligations of the Subsidiary
Guarantors hereunder shall be absolute and unconditional, joint and several,
under any and all circumstances. Without limiting the generality of the
foregoing, it is agreed that the occurrence of any one or more of the following
shall not alter or impair the liability of the Subsidiary Guarantors hereunder
which shall remain absolute and unconditional as described above:
(i) at any time or from time to time, without notice to the
Subsidiary Guarantors, the time for any performance of or compliance with
any of the Guaranteed Obligations shall be extended, or such performance or
compliance shall be waived;
(ii) any of the acts mentioned in any of the provisions of the
Credit Agreement, any other Credit Document or any other agreement or
instrument referred to herein or therein shall be done or omitted;
Subsidiary Guarantee Agreement
<PAGE> 223
-3-
(iii) the maturity of any of the Guaranteed Obligations shall be
accelerated, or any of the Guaranteed Obligations shall be modified,
supplemented or amended in any respect, or any right under the Credit
Agreement, any other Credit Document or any other agreement or instrument
referred to herein or therein shall be waived or any other guarantee of any
of the Guaranteed Obligations or any security therefor shall be released or
exchanged in whole or in part or otherwise dealt with; or
(iv) any lien or security interest granted to, or in favor of, any
Agent or any Lender or Lenders as security for any of the Guaranteed
Obligations shall fail to be perfected.
The Subsidiary Guarantors hereby expressly waive diligence, presentment, demand
of payment, protest and all notices whatsoever, and any requirement that any
Agent or Lender exhaust any right, power or remedy or proceed against the
Company under the Credit Agreement, any other Credit Document or any other
agreement or instrument referred to herein or therein, or against any other
Person under any other guarantee of, or security for, any of the Guaranteed
Obligations.
SECTION 2.03. Reinstatement. The obligations of the Subsidiary
Guarantors under this Article II shall be automatically reinstated if and to the
extent that for any reason any payment by or on behalf of the Company in respect
of the Guaranteed Obligations is rescinded or must be otherwise restored by any
holder of any of the Guaranteed Obligations, whether as a result of any
proceedings in bankruptcy or reorganization or otherwise, and the Subsidiary
Guarantors jointly and severally agree that they will indemnify the
Administrative Agent and each Lender on demand for all reasonable costs and
expenses (including, without limitation, fees of counsel) incurred by the
Administrative Agent or such Lender in connection with such rescission or
restoration, including any such costs and expenses incurred in defending against
any claim alleging that such payment constituted a preference, fraudulent
transfer or similar payment under any bankruptcy, insolvency or similar law.
SECTION 2.04. Subrogation. The Subsidiary Guarantors hereby
jointly and severally agree that until the payment and satisfaction in full of
all Guaranteed Obligations and the expiration or termination of the Commitments
of the Lenders under the Credit Agreement they shall not exercise any right or
remedy arising by reason of any performance by them of their guarantee in
Section 2.01, whether by subrogation or otherwise, against the Company or any
other guarantor of any of the Guaranteed Obligations or any security for any of
the Guaranteed Obligations.
SECTION 2.05. Remedies. The Subsidiary Guarantors jointly and
severally agree that, as between the Subsidiary Guarantors and the Lenders, the
obligations of the Company under the Credit Agreement may be declared to be
forthwith due and payable as provided in Article IX of the Credit Agreement (and
shall be deemed to have become automatically due and payable in the
circumstances provided in said Article IX) for purposes of Section 2.01
notwithstanding any stay, injunction or other prohibition preventing such
declaration (or such obligations from becoming automatically due and payable) as
against the Company and that, in the event of such declaration (or such
obligations being deemed to have become automatically due and payable), such
obligations (whether or not due and payable by the
Subsidiary Guarantee Agreement
<PAGE> 224
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Company) shall forthwith become due and payable by the Subsidiary Guarantors for
purposes of Section 2.01.
SECTION 2.06. Instrument for the Payment of Money. Each Subsidiary
Guarantor hereby acknowledges that the guarantee in this Article II constitutes
an instrument for the payment of money, and consents and agrees that any Lender
or the Administrative Agent, at its sole option, in the event of a dispute by
such Subsidiary Guarantor in the payment of any moneys due hereunder, shall have
the right to bring motion-action under New York CPLR Section 3213.
SECTION 2.07. Continuing Guarantee. The guarantee in this Article
II is a continuing guarantee, and shall apply to all Guaranteed Obligations
whenever arising.
SECTION 2.08. Rights of Contribution. The Subsidiary Guarantors
hereby agree, as between themselves, that if any Subsidiary Guarantor shall
become an Excess Funding Subsidiary Guarantor (as defined below) by reason of
the payment by such Subsidiary Guarantor of any Guaranteed Obligations, each
other Subsidiary Guarantor shall, on demand of such Excess Funding Subsidiary
Guarantor (but subject to the next sentence), pay to such Excess Funding
Subsidiary Guarantor an amount equal to such Subsidiary Guarantor's Pro Rata
Share (as defined below and determined, for this purpose, without reference to
the Properties, debts and liabilities of such Excess Funding Subsidiary
Guarantor) of the Excess Payment (as defined below) in respect of such
Guaranteed Obligations. The payment obligation of a Subsidiary Guarantor to any
Excess Funding Subsidiary Guarantor under this Section shall be subordinate and
subject in right of payment to the prior payment in full of the obligations of
such Subsidiary Guarantor under the other provisions of this Article II and such
Excess Funding Subsidiary Guarantor shall not exercise any right or remedy with
respect to such excess until payment and satisfaction in full of all of such
obligations.
For purposes of this Section, (i) "Excess Funding Subsidiary
Guarantor" shall mean, in respect of any Guaranteed Obligations, a Subsidiary
Guarantor that has paid an amount in excess of its Pro Rata Share of such
Guaranteed Obligations, (ii) "Excess Payment" shall mean, in respect of any
Guaranteed Obligations, the amount paid by an Excess Funding Subsidiary
Guarantor in excess of its Pro Rata Share of such Guaranteed Obligations and
(iii) "Pro Rata Share" shall mean, for any Subsidiary Guarantor, the ratio
(expressed as a percentage) of (x) the amount by which the aggregate fair
saleable value of all Properties of such Subsidiary Guarantor (excluding any
shares of stock of any other Subsidiary Guarantor) exceeds the amount of all the
debts and liabilities of such Subsidiary Guarantor (including contingent,
subordinated, unmatured and unliquidated liabilities, but excluding the
obligations of such Subsidiary Guarantor hereunder and any obligations of any
other Subsidiary Guarantor that have been Guaranteed by such Subsidiary
Guarantor) to (y) the amount by which the aggregate fair saleable value of all
Properties of all of the Subsidiary Guarantors exceeds the amount of all the
debts and liabilities (including contingent, subordinated, unmatured and
unliquidated liabilities, but excluding the obligations of the Subsidiary
Guarantors hereunder) of all of the Subsidiary Guarantors, determined (A) with
respect to any Subsidiary Guarantor that is a party hereto on the date hereof,
as of the date hereof, and (B) with respect to any other Subsidiary Guarantor,
as of the date such Subsidiary Guarantor becomes a Subsidiary Guarantor
hereunder.
Subsidiary Guarantee Agreement
<PAGE> 225
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SECTION 2.09. General Limitation on Guarantee Obligations. In any
action or proceeding involving any state corporate law, or any state or Federal
bankruptcy, insolvency, reorganization or other law affecting the rights of
creditors generally, if the obligations of any Subsidiary Guarantor under
Section 2.01 would otherwise, taking into account the provisions of Section
2.08, be held or determined to be void, invalid or unenforceable, or
subordinated to the claims of any other creditors, on account of the amount of
its liability under Section 2.01, then, notwithstanding any other provision
hereof to the contrary, the amount of such liability shall, without any further
action by such Subsidiary Guarantor, the Administrative Agent, the Lenders or
any other Person, be automatically limited and reduced to the highest amount
that is valid and enforceable and not subordinated to the claims of other
creditors as determined in such action or proceeding.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Each Subsidiary Guarantor represents and warrants to the Lenders
and the Administrative Agent that:
SECTION 3.01. Corporate Existence. Such Subsidiary Guarantor: (a)
is a corporation, limited liability company, partnership or other entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation; (b) has all requisite corporate power to own
its assets and carry on its business as now being or as proposed to be
conducted; and (c) is qualified to do business and is in good standing in all
jurisdictions in which the nature of the business conducted by it makes such
qualification necessary and where failure so to qualify could reasonably be
likely (either individually or in the aggregate) to have a Material Adverse
Effect.
SECTION 3.02. No Conflicts. None of the execution and delivery of
this Agreement and the Security Agreement, the consummation of the transactions
herein or therein contemplated or compliance with the terms and provisions
hereof or thereof will conflict with or result in a breach of, or require any
consent under, the charter, by-laws or other organizational documents of such
Subsidiary Guarantor, or any applicable law or regulation, or any order, writ,
injunction or decree of any court or governmental authority or agency, or any
material agreement or instrument to which such Subsidiary Guarantor is a party
or by which any of them is bound or to which any of them is subject, or
constitute a default under any such agreement or instrument, or result in the
creation or imposition of any Lien (other than a Permitted Lien) upon any of the
revenues or assets of such Subsidiary Guarantor pursuant to the terms of any
such agreement or instrument.
SECTION 3.03. Corporate Action. Such Subsidiary Guarantor has all
necessary corporate power and authority to execute, deliver and perform its
obligations under this Agreement and the Security Agreement; the execution,
delivery and performance by such Subsidiary Guarantor of this Agreement and the
Security Agreement have been duly authorized by all necessary corporate action
on its part; and each of this Agreement and the Security Agreement has been duly
and validly executed and delivered by such Subsidiary Guarantor and
Subsidiary Guarantee Agreement
<PAGE> 226
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constitutes its legal, valid and binding obligation, enforceable in accordance
with its respective terms.
SECTION 3.04. Approvals. No authorizations, approvals or consents
of, and no filings or registrations with, any Governmental Authority are
necessary for the execution, delivery or performance by such Subsidiary
Guarantor of this Agreement or the Security Agreement or for the validity or
enforceability hereof or thereof.
ARTICLE IV
MISCELLANEOUS
SECTION 4.01. No Waiver. No failure on the part of the
Administrative Agent or any Lender to exercise, and no course of dealing with
respect to, and no delay in exercising, any right, power or remedy hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise by
the Administrative Agent or any Lender of any right, power or remedy hereunder
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy. The remedies herein are cumulative and are not exclusive
of any remedies provided by law.
SECTION 4.02. Notices. All notices, requests, consents and demands
hereunder shall be in writing and telecopied or delivered to the intended
recipient at its respective address specified in Section 11.01 of the Credit
Agreement (or, in the case of the Subsidiary Guarantors, such address of the
Company) or, as to any party, at such other address as shall be designated by
such party in a notice to each other party. Except as otherwise provided in this
Agreement, all such communications shall be deemed to have been duly given when
transmitted by telecopier or personally delivered or, in the case of a mailed
notice, upon receipt, in each case given or addressed as aforesaid.
SECTION 4.03. Expenses. The Subsidiary Guarantors jointly and
severally agree to reimburse each of the Lenders and the Administrative Agent
for all reasonable costs and expenses of the Lenders and the Administrative
Agent (including, without limitation, the reasonable fees and expenses of legal
counsel) in connection with (i) any Event of Default and any enforcement or
collection proceeding resulting therefrom, including, without limitation, all
manner of participation in or other involvement with (x) bankruptcy, insolvency,
receivership, foreclosure, winding up or liquidation proceedings, (y) judicial
or regulatory proceedings and (z) workout, restructuring or other negotiations
or proceedings (whether or not the workout, restructuring or transaction
contemplated thereby is consummated) and (ii) the enforcement of this Section.
SECTION 4.04. Amendments, Etc. The terms of this Agreement may be
waived, altered or amended only by an instrument in writing duly executed by
each Subsidiary Guarantor and the Administrative Agent. Any such amendment or
waiver shall be binding upon the Administrative Agent, each Lender, each holder
of any of the Guaranteed Obligations and each Subsidiary Guarantor.
SECTION 4.05. Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the respective successors and assigns
of each Subsidiary Guarantor,
Subsidiary Guarantee Agreement
<PAGE> 227
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the Administrative Agent, the Lenders and each holder of any of the Guaranteed
Obligations, provided, however, that no Subsidiary Guarantor shall assign or
transfer its rights hereunder without the prior written consent of the
Administrative Agent.
SECTION 4.06. Captions. The captions and section headings used
herein are for convenience of reference only, are not part of this Agreement and
shall not effect construction of, or be taken into consideration, in the
interpreting of this Agreement.
SECTION 4.07. Counterparts. This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract.
SECTION 4.08. Governing Law; Jurisdiction; Consent to Service of
Process.
(a) This Agreement shall be construed in accordance with and
governed by the law of the State of New York.
(b) Each Subsidiary Guarantor hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court of the Southern District of New
York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement or any other Credit Document to
which it is a party, or for recognition or enforcement of any judgment, and each
of the parties hereto hereby irrevocably and unconditionally agrees that all
claims in respect of any such action or proceeding may be heard and determined
in such New York State or, to the extent permitted by law, in such Federal
court. Each of the parties hereto agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that the Administrative Agent
or any Lender may otherwise have to bring any action or proceeding relating to
this Agreement against any Subsidiary Guarantor or its properties in the courts
of any jurisdiction.
(c) Each Subsidiary Guarantor hereby irrevocably appoints CT
Corporation (the "Process Agent") with an office on the date hereof at 1633
Broadway, New York, New York 10019 as its agent to receive on behalf of it and
its property service of copies of the summons and complaint and any other
process which may be served in any such suit, action or proceeding. Such service
may be made by mailing or delivering a copy of such process to any Subsidiary
Guarantor, in care of the Process Agent at the Process Agent's above address and
each Subsidiary Guarantor hereby irrevocably authorizes and directs the Process
Agent to receive such service on its behalf. The Administrative Agent and each
Lender agree to mail to each Subsidiary Guarantor at its address provided under
Section 4.02 a copy of any summons, complaint, or other process mailed or
delivered by it to such Subsidiary Guarantor in care of the Process Agent. As an
alternate method of service, each Subsidiary Guarantor also irrevocably consents
to the service of any and all process in any such suit, action or proceeding by
mailing of copies of such process to it at its address provided under Section
4.02. All mailings under this Section shall be by certified mail, return receipt
requested. Nothing in this Agreement will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.
Subsidiary Guarantee Agreement
<PAGE> 228
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(d) Each Subsidiary Guarantor hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement in
any court referred to in paragraph (b) of this Section. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.
(e) To the extent that any Subsidiary Guarantor may be or become
entitled, in any jurisdiction in which judicial proceedings may at any time be
commenced with respect to this Agreement, to claim for itself or its property or
revenues any immunity from suit, court jurisdiction, attachment prior to
judgment, attachment in aid of execution of a judgment, execution of a judgment
or from any other legal process or remedy relating to its obligations under this
Agreement and to the extent that in any such jurisdiction there may be
attributed such an immunity (whether or not claimed), such Subsidiary Guarantor
hereby irrevocably agrees not to claim and hereby irrevocably waives such
immunity to the fullest extent permitted by the laws of such jurisdiction.
SECTION 4.09. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 4.10. No Third Party Beneficiaries. The agreements of the
parties hereto are solely for the benefit of the Subsidiary Guarantors, the
Administrative Agent and the Lenders, and no other Person (including, without
limitation, any other Credit Party, any contractor, subcontractor, supplier or
materialman furnishing supplies, goods or services to or for the benefit of the
Project or any other creditor of the Company or any of its Subsidiaries) shall
have any rights hereunder.
SECTION 4.11. Severability. Any provision of this Agreement held
to be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
Subsidiary Guarantee Agreement
<PAGE> 229
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IN WITNESS WHEREOF, the parties hereto have caused this Guarantee
Agreement to be duly executed and delivered as of the day and year first above
written.
SUBSIDIARY GUARANTORS
IRIDIUM CAPITAL CORPORATION
By
------------------------
Name:
Title:
IRIDIUM IP LLC
By
------------------------
Name:
Title:
IRIDIUM ROAMING LLC
By
------------------------
Name:
Title:
IRIDIUM FACILITIES CORPORATION
By
------------------------
Name:
Title:
Subsidiary Guarantee Agreement
<PAGE> 230
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ADMINISTRATIVE AGENT
THE CHASE MANHATTAN BANK,
as Administrative Agent
By
------------------------
Name:
Title:
Subsidiary Guarantee Agreement
<PAGE> 231
EXHIBIT E
[FORM OF GUARANTEE ASSUMPTION AGREEMENT]
GUARANTEE ASSUMPTION AGREEMENT
GUARANTEE ASSUMPTION AGREEMENT dated as of [_______________,
199_], by [_______________________], a [______________ corporation/limited
liability company/partnership] (the "Additional Subsidiary Guarantor"), in favor
of THE CHASE MANHATTAN BANK, as administrative agent for the lenders party to
the Credit Agreement referred to below (in such capacity together with its
successors in such capacity, the "Administrative Agent").
Iridium Operating LLC, a Delaware limited liability company, the
lenders named therein (the "Lenders"), the Global Lead Arrangers, the
Administrative Agent and the Documentation Agent are parties to a Senior Secured
Credit Agreement dated as of December 23, 1998 (as modified, supplemented or
otherwise modified and in effect from time to time, the "Credit Agreement", the
terms defined therein and not otherwise defined herein being used as therein
defined).
Pursuant to Section 6.11 of the Credit Agreement, the Additional
Subsidiary Guarantor hereby agrees to become a "Subsidiary Guarantor" for all
purposes of the Subsidiary Guarantee Agreement, and an "Obligor" for all
purposes of the Security Agreement. Without limiting the generality of the
foregoing, the Additional Subsidiary Guarantor hereby, jointly and severally
with the other Subsidiary Guarantors, guarantees to each Lender and each Agent
and their respective successors and assigns the prompt payment in full when due
(whether at stated maturity, by acceleration or otherwise) of all Guaranteed
Obligations (as defined in the Subsidiary Guarantee Agreement) in the same
manner and to the same extent as is provided in Article II of the Subsidiary
Guarantee Agreement. In addition, the Additional Subsidiary Guarantor hereby
makes the representations and warranties set forth in Article III of the
Subsidiary Guarantee Agreement, and in Article II of the Security Agreement,
with respect to itself and its obligations under this Agreement (with any
reference in said Sections to the Credit Documents being deemed to include a
reference to this Agreement). In addition, Annexes 1, 2, 3, 4, 5 and 6 to the
Security Agreement shall be deemed to be supplemented in respect of the
Additional Subsidiary Guarantor as specified in Appendix A hereto.
Guarantee Assumption Agreement
<PAGE> 232
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IN WITNESS WHEREOF, the Additional Subsidiary Guarantor has caused
this Guarantee Assumption Agreement to be duly executed and delivered as of the
day and year first above written.
[ADDITIONAL SUBSIDIARY GUARANTOR]
By
-----------------------------
Name:
Title:
Accepted and Agreed:
THE CHASE MANHATTAN BANK,
as Administrative Agent
By
---------------------------
Name:
Title:
Guarantee Assumption Agreement
<PAGE> 233
Appendix A to Guarantee
Assumption Agreement
Supplement to Annex 1:
[To be completed]
Supplement to Annex 2:
[To be completed]
Supplement to Annex 3:
[To be completed]
Supplement to Annex 4:
[To be completed]
Supplement to Annex 5:
[To be completed]
Supplement to Annex 6:
[To be completed]
Appendix A to Guarantee Assumption Agreement
<PAGE> 234
EXHIBIT F
[FORM OF DEPOSITARY AGREEMENT]
DEPOSIT, DISBURSEMENT AND ACCOUNT CONTROL AGREEMENT dated as of
December __, 1998 between: IRIDIUM OPERATING LLC, a Delaware limited liability
company (the "Company"); THE CHASE MANHATTAN BANK ("Chase"), in its capacity as
collateral agent Hunder the Credit Agreement and the other Credit Documents
referred to below (together with its successors and permitted assigns in such
capacity, the "Collateral Agent"); and THE CHASE MANHATTAN BANK in its capacity
as depositary bank (together with its successors in such capacity, the
"Depositary Bank").
R E C I T A L S
WHEREAS, the Company, the Global Lead Arrangers named therein, the
Lenders party thereto, the Collateral Agent, Chase, in its capacity as the
Administrative Agent, and Barclays Bank PLC, in its capacity as the
Documentation Agent, have entered into a Senior Secured Credit Agreement dated
as of December 23, 1998 (as amended, supplemented or otherwise modified and in
effect from time to time, the "Credit Agreement"), providing, subject to the
terms and conditions thereof, for the Lenders to make loans to the Company in an
aggregate principal amount not exceeding $800,000,000;
WHEREAS, the obligations of the Company under the Credit Agreement
and the other Credit Documents (as defined in the Credit Agreement) will be
secured by certain of the assets of the Company pursuant to certain of the
Security Documents;
WHEREAS, the Collateral Agent and the Company desire to appoint
the Depositary Bank to act as depositary bank with respect to the various
Accounts (as defined below) established with the corporate trust department of
the Depositary Bank at its office at 450 West 33rd Street, 15th Floor, New York,
New York 10001 pursuant to this Agreement; and
WHEREAS, the Depositary Bank has agreed to establish and maintain
the Accounts in accordance with this Agreement;
NOW THEREFORE, for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
Depositary Agreement
<PAGE> 235
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ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms. Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned thereto in the Credit
Agreement, whether specifically set forth therein or by reference to another
document. Unless otherwise stated, any reference in this Agreement to any Person
shall include its permitted successors and assigns and, in the case of any
Government Authority, any Person succeeding to its functions and capacities. In
addition, as used herein the following terms shall have the following respective
meanings (all terms defined in this Section and in the other provisions of this
Agreement in the singular to have the same meanings when used in the plural and
vice versa):
"Accounts" means the accounts specified in Section 3.01.
"Authorized Officer" means (a) with respect to the Company, any
Responsible Officer the names (and specimen signatures) of which shall be
specified in writing from time to time by the Company to the Depositary Bank and
(b) with respect to the Collateral Agent, any officer or other representative of
the Collateral Agent designated in writing to the Depositary Bank to act for the
Collateral Agent for purposes of this Agreement.
"General Receipt & Disbursement Account" means the account
entitled "Iridium General Receipt & Disbursement Account" established and
maintained by the Depositary Bank.
"Iridium Clearing Account" means one or more Dollar accounts
(including, without limitation, the Iridium Sub-Clearing Account) of the Company
established and maintained with depository institutions that may be located in
the United States of America or offshore and will be used for the purpose of
settling payments due to the Company and its Subsidiaries from, and payments due
by the Company and its Subsidiaries to, other parties in connection with the
operation of the Iridium Business, all as generally contemplated by Article VI
of the Gateway Authorization Agreements.
"Iridium Sub-Clearing Account" means one or more accounts that are
part of the Iridium Clearing Account and hold moneys paid from time to time to
the Company or any of its Subsidiaries as a result of the settlement process
effected through the Iridium Clearing Account.
"Loss Proceeds Account" means the account entitled "Iridium Loss
Proceeds Account" established and maintained by the Depositary Bank.
"Permitted Investments" means:
(a) direct obligations of, or obligations guaranteed by, the
United States of America for the payment of which obligations or guarantee
the full faith and credit of the United States of America is pledged and
which have a remaining Average Life of not more than 365 days from the date
of acquisition thereof;
(b) investments in commercial paper maturing not more than 270
days after the date of acquisition thereof and having, at such date of
acquisition, a credit rating of at
Depositary Agreement
<PAGE> 236
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least P-1 from S&P or A-1 from Moody's (or such similar equivalent rating
by at least one "nationally recognized statistical rating organization" (as
defined in Rule 436 under the Securities Act of 1933, as amended));
(c) investments in certificates of deposit, banker's acceptances
and time deposits maturing not more than 270 days after the date of
acquisition thereof issued or guaranteed by or placed with, and money
market deposit accounts issued or offered by, any commercial bank or trust
company organized under the laws of the United States of America or any
State thereof or any other country which is a member of the Organization
for Economic Cooperation and Development, in each case which has a combined
capital, surplus and undivided profits of not less than $500,000,000 or its
equivalent in foreign currency, and whose debt is rated at least A- by S&P
or A-3 by Moody's (or such similar equivalent rating by a "nationally
recognized statistical rating organization" (as defined above));
(d) repurchase obligations with a term of not more than 7 days for
securities described in clause (a) of this definition and entered into with
a financial institution which has a combined capital, surplus and undivided
profits of not less than $500,000,000 or its equivalent in foreign
currency, and whose debt is rated at least A- by from S&P or A-3 by Moody's
(or such similar equivalent rating by a "nationally recognized statistical
rating organization" (as defined above)); and
(e) any mutual or similar fund investing exclusively in Permitted
Investments of the type described in clauses (a), (b), (c) and/or (d)
above.
"Prepayment Account" means the account entitled "Iridium
Prepayment Account" established and maintained by the Depositary Bank.
"Responsible Officer" means the chief executive officer, chief
financial officer, general counsel, any senior vice president, any vice
president or the treasurer of the Company.
"Restoration Sub-Account" means the "Iridium Restoration Sub-
Account" established and maintained by the Depositary Bank.
"Secured Obligations" has the meaning assigned to such term in the
Security Agreement.
"Termination Date" means the date on which the Collateral Agent
shall advise the Depositary Bank in writing that all principal of and interest
on the Loans and all other amounts owing by the Company or any of its
Subsidiaries under the Credit Agreement and the other Credit Documents have been
paid in full and that the Commitments have expired or terminated.
SECTION 1.02. Uniform Commercial Code. As used herein, the term
"UCC" shall mean the Uniform Commercial Code as in effect in the State of New
York. All terms defined in the UCC shall have the respective meanings given to
those terms in the UCC, except where the context otherwise requires.
Depositary Agreement
<PAGE> 237
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SECTION 1.03. Terms Generally. The definitions of terms herein
shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
The word "will" shall be construed to have the same meaning and effect as the
word "shall". Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified, including an amendment
and restatement thereof, but subject to any restrictions on such amendments,
supplements or modifications set forth herein, (b) any reference herein to any
Person shall be construed to include such Person's successors and assigns or, in
the case of any Government Authority, any successor or other entity that
performs equivalent functions in whole or in part, (c) the words "herein",
"hereof" and "hereunder", and words of similar import, shall be construed to
refer to this Agreement in its entirety and not to any particular provision
hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules
shall be construed to refer to Articles and Sections of, and Exhibits and
Schedules to, this Agreement and (e) the words "asset" and "property" shall be
construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.
ARTICLE II
ACCEPTANCE OF APPOINTMENT AS COLLATERAL AGENT
AND DEPOSITARY BANK
SECTION 2.01. Acceptance of Appointment as Collateral Agent .
Chase does hereby agree to serve as Collateral Agent for the benefit of the
Secured Parties under this Agreement.
SECTION 2.02. Depositary Bank.
(a) Acceptance of Appointment of Depositary Bank. Chase hereby
agrees to act as Depositary Bank under this Agreement. The Company and the
Collateral Agent hereby acknowledge and agree that the Depositary Bank shall act
as Depositary Bank under this Agreement.
(b) Confirmation and Agreement. The Depositary Bank acknowledges,
confirms and agrees that (i) the Depositary Bank has established the Accounts as
set forth in Section 3.01, (ii) each Account is a securities account in respect
of which the Depository Bank is the securities intermediary, (iii) the Company
is the entitlement holder of the Accounts, (iv) all cash and other property
delivered to the Depositary Bank pursuant to this Agreement or the other
Security Documents will be promptly credited to an Account, (v) all securities
in registered form or payable to, or to order of a person, and credited to any
Account shall be registered in the name of, payable to or to the order of, or
specially indorsed to, the Depositary Bank or in blank, or credited to another
securities account maintained in the name of the Depositary Bank, and in no case
will any securities credited to any Account be registered in the name of,
payable to or to the order of, or specially indorsed to, the Company except to
the extent the foregoing have been
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specially indorsed by the Company to the Depositary Bank or in blank, (vi) the
Depositary Bank shall promptly comply with all instructions of the Collateral
Agent and, to the limited extent set forth in Section 2.03, the Company in
connection with the transfer or withdrawal of amounts in the Accounts and (vii)
the Depositary Bank shall not change the name or account number of any Account
without the prior written consent of the Collateral Agent and at least 5
Business Days prior notice to the Company.
(c) Financial Assets Election. Each of the Company, the Collateral
Agent and the Depositary Bank agrees that each item of property (whether cash, a
security, an instrument or obligation, share, participation, interest or any
other property whatsoever) credited to any Account shall be treated as a
financial asset under Article 8 of the UCC.
(d) Entitlement Orders. Anything herein to the contrary
notwithstanding, the Company irrevocably agrees that the Depositary Bank may,
and the Depositary Bank agrees that it shall, comply with entitlement orders
originated by the Collateral Agent and relating to any Account without further
consent by the Company or any other Person and without regard to whether the
Collateral Agent is, under the terms and conditions of this Agreement, entitled
to give such entitlement orders. If there is any conflict between entitlement
orders originated by the Company and entitlement orders originated by the
Collateral Agent, the latter shall control.
(e) Subordination of Lien; Waiver of Set-Off. In the event that
the Depositary Bank has or subsequently obtains by agreement, operation of law
or otherwise a lien or security interest in any Account or any security
entitlement credited thereto, the Depositary Bank agrees that such lien or
security interest shall be subordinate to the lien and security interest of the
Collateral Agent. The financial assets standing to the credit of the Accounts
will not be subject to deduction, set-off, banker's lien, or any other right in
favor of any Person other than the Collateral Agent (except the amount of any
checks which have been credited to any Account but are subsequently returned
unpaid because of uncollected or insufficient funds).
(f) No Other Agreements. None of the Depositary Bank, the
Collateral Agent or the Company has entered into any agreement with respect to
the Accounts or any financial assets credited to any Account other than this
Agreement, in the case of the parties hereto, and the Credit Agreement and the
Security Agreement, in the case of the Company and the Collateral Agent, similar
agreements entered into pursuant to the Existing Secured Credit Agreement and
agreements pursuant to which payments are to be made into the Accounts. The
Depositary Bank has not entered into any agreement with the Company or any other
Person purporting to limit or condition the obligation of the Depositary Bank to
comply with entitlement orders originated by the Collateral Agent in accordance
with Section 2.02(d). In the event of any conflict between this Agreement (or
any portion hereof) or any other Security Document or any other agreement now
existing or hereafter entered into (other than the Credit Agreement), the terms
of this Agreement shall prevail for purposes hereof.
(g) Notice of Adverse Claims. Except for the claims and interest
of the Collateral Agent and the Company in each of the Accounts, the Depositary
Bank does not know of any claim to, or interest in, any Account or in any
financial asset credited thereto. If any Person asserts any lien, encumbrance or
adverse claim (including any writ, garnishment, judgment, warrant of attachment,
execution or similar process) against any Account or in any financial
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asset credited thereto, the Depositary Bank will promptly notify the Collateral
Agent and the Company thereof.
(h) Rights and Powers of the Collateral Agent. The agreement
hereunder of the Depositary Bank to comply with entitlement orders of the
Collateral Agent is irrevocable during the term of this Agreement and has been
made in order to perfect the lien upon and security interests in the Accounts in
favor of the Collateral Agent and will be affected by neither the bankruptcy of
the Company nor the lapse of time.
SECTION 2.03. Limitation on Company's Rights. Until the
Termination Date, the Company shall not have any rights to withdraw cash or
other property held in or credited to the Accounts, except for the right to give
instructions to the Depositary Bank to make withdrawals of moneys held in the
Accounts as permitted by this Agreement and the right to direct the investment
of moneys held in the Accounts as permitted by Section 5.03.
ARTICLE III
ESTABLISHMENT OF THE ACCOUNTS
SECTION 3.01. Establishment of the Accounts. The Depositary Bank
has established the following special, segregated securities accounts (the
"Accounts") which (except as expressly provided herein) shall be maintained at
all times until the termination of this Agreement:
(1) the General Receipt & Disbursement Account;
(2) the Loss Proceeds Account; and
(3) the Prepayment Account.
The Depositary Bank has established the Restoration Sub-Account
within the Loss Proceeds Account.
In the event that, in accordance with this Agreement, the
Depositary Bank is required to segregate certain moneys in any Account from any
other amounts on deposit in such Account pending transfer or withdrawal in
accordance with this Agreement, the Depositary Bank shall (subject to Section
5.03) either (i) hold such moneys in such Account for use solely for such
transfer or withdrawal or (ii) if requested in a certificate of an Authorized
Officer of the Collateral Agent, create a separate sub-account for such purpose.
For ease of administration or if deemed advisable or necessary by the Collateral
Agent to give effect to the purposes of this Agreement, the Depositary Bank may,
with the consent of the Collateral Agent and upon notice to the Company and the
Collateral Agent, establish other sub-accounts within any Account.
SECTION 3.02. Lien and Security Interest, Etc. As collateral
security for the prompt payment in full when due of the Secured Obligations, the
Company hereby pledges, assigns, hypothecates and transfers to the Collateral
Agent for the equal and ratable benefit of the Secured Parties, and hereby
grants to the Collateral Agent for the equal and ratable benefit of the Secured
Parties a lien on and security interest in, all of the Company's right, title
and interest, whether now owned or hereafter acquired, in and to (i) each
Account and (ii) all cash, investments, securities or other property at any time
on deposit in or credited to any Account,
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including all income or gain earned thereon and any proceeds thereof. For
avoidance of doubt, and not withstanding anything herein to the contrary, the
security interests purported to be created by this Agreement and the Security
Agreement do not include the Iridium Clearing Account or any cash or other
property on deposit therein or credited thereto.
SECTION 3.03. Termination. This Agreement shall remain in full
force and effect until the Termination Date.
ARTICLE IV
OPERATION OF THE ACCOUNTS
SECTION 4.01. General Receipt & Disbursement Account.
(a) Deposits into General Receipt & Disbursement Account. The
Company agrees, and will take all necessary action to ensure, that the following
amounts shall be deposited directly into the General Receipt & Disbursement
Account:
(i) all proceeds of the Loans under the Credit Agreement;
(ii) all proceeds of the loans under the Motorola Guaranteed
Credit Agreement;
(iii) all amounts transferred from the Loss Proceeds Account
pursuant to Section 4.02(b)(iii);
(iv) all amounts transferred from the Prepayment Account pursuant
to Section 4.03(b)(iii);
(v) all dividends or other distributions, or other payments, in
cash by any Subsidiary of the Company to the Company;
(vi) any income from the investment of moneys in the Accounts
pursuant to Section 5.03;
(vii) all other income (howsoever earned), revenue (howsoever
generated) and proceeds of any nature whatsoever received by the Company or
any of its Subsidiaries (but excluding (i) any amounts required or
permitted by this Agreement to be deposited to another Account, (ii) any
amounts which are held in, or to be credited to, the Iridium Clearing
Account, or any interest earned with respect to such amount while so held
in the Iridium Clearing Account (other than the Iridium Sub-Clearing
Account to the extent provided in clause (viii) below) and (iii) the
proceeds of any Debt Incurrence permitted under Section 7.01(f) of the
Credit Agreement which are being used to Refinance outstanding
Indebtedness, or proceeds of any Debt Incurrence permitted under Section
7.01(d) which are being used to Refinance Deferred O&M Amounts, but only to
the extent such proceeds are paid to the lenders of such outstanding
Indebtedness and no prepayment is required in connection with such Debt
Incurrence pursuant to Section 2.09 of the Credit Agreement); and
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(viii) all amounts in the Iridium Sub-Clearing Account to the
extent required to be transferred to the General Receipt & Disbursement
Account pursuant to Section 4.01(d).
(b) Disbursements from General Receipt & Disbursement Account.
Except as otherwise provided in this Agreement, the amounts held in the General
Receipt & Disbursement Account shall be applied solely for the payment or
reimbursement of Costs. All moneys withdrawn from the General Receipt &
Disbursement Account shall be withdrawn in accordance with the disbursement
procedures set forth below:
(i) The Company may request the withdrawal of moneys in the
General Receipt & Disbursement Account for the purpose of paying or
reimbursing Costs or to transfer funds to one or more of the Local
Accounts. Upon receipt of instructions from an Authorized Officer of the
Company requesting a withdrawal of funds from the General Receipt &
Disbursement Account, the Depositary Bank shall effect such withdrawal and
either pay such funds to the intended payee(s) thereof or transfer such
funds to a Local Account, in each case as specified in such instructions.
The Company will furnish a copy of each such instruction to the Collateral
Agent. All funds held in the General Receipt & Disbursement Account shall
be used by the Company from time to time to make payment or reimbursement
of Costs or any other payments permitted under the Credit Agreement as the
Company shall direct, but in any event all payments in respect of the Space
System Contract, the Terrestrial Network Development Contract and the O&M
Contract and all payments in respect of Indebtedness of the Company and its
Subsidiaries will be made from funds in the General Receipt & Disbursement
Account.
(ii) If at any time the amount available to be applied to the
payment of any of the Company's obligations under clause (i) above is
insufficient to pay in full all amounts required to be paid thereunder, the
Depositary Bank shall promptly advise the Company (with a copy to the
Collateral Agents) of such insufficiency and shall not make payment of any
amounts unless and until the Company has specified in writing to the
Depositary Bank the payee(s) and amount(s) to be so paid with the amounts
available.
(iii) Notwithstanding anything herein to the contrary, the amount
of any proceeds of workers' compensation insurance, comprehensive general
liability insurance and comprehensive automobile liability insurance
received by the Company and deposited into the General Receipt &
Disbursement Account which is required to be paid over by the Company to
any Person other than the Company or any of its Subsidiaries shall be, upon
receipt of a written request from an Authorized Officer of the Company that
such proceeds that have been deposited into the General Receipt &
Disbursement Account are required to be so paid over, promptly disbursed to
the Company, whereupon such proceeds shall be paid over by the Company to
the Person(s) entitled thereto.
(c) Local Accounts. In addition to the Accounts, the Company may
at any time from and after the date hereof establish and maintain one or more
other deposit accounts (each hereinafter referred to as a "Local Account") with
(i) The Chase Manhattan Bank (or such other commercial bank which shall from
time to time act as the Collateral Agent hereunder) (the "Chase Local
Accounts"), (ii) any other depository institution designated by the Company
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located in the United States of America (the "Other Domestic Local Accounts"
and, together with the Chase Local Accounts, the "Domestic Local Accounts") and
(iii) one or more deposit accounts with any depository institution designated by
the Company located outside of the United States (the "Foreign Local Accounts"
and, together with the Other Domestic Local Accounts, the "Other Local
Accounts"); provided that (x) the maximum aggregate amount of cash or other
property at any time held in or credited to the Other Local Accounts shall be
$15,000,000 and (y) each Domestic Local Account shall be and at all times remain
subject to the security interest created under this Agreement and the Security
Agreement, and the Company shall cause each such depositary institution therefor
to execute and deliver such acknowledgment, agreement or other documentation,
and/or establish such control arrangements, as the Collateral Agent may
reasonably request to give effect to the purposes of this Section. All funds
held in the Local Accounts may be used by the Company from time to time to make
payment or reimbursement of Costs as the Company shall direct (subject to the
last sentence of Section 4.01(b)(i)); provided that funds held in any Foreign
Local Account may be used by the Company only for the payment of operating
expenses (including taxes) owing by the Company in the jurisdiction in which
such Foreign Local Account is located. The Local Accounts shall not constitute
Accounts and, except as provided in this Section 4.01(c), shall not be subject
to the terms of this Agreement.
(d) Iridium Clearing Account. Notwithstanding anything herein to
the contrary, no cash or other property in the Iridium Clearing Account shall be
required to be deposited into any of the Accounts (nor shall the Secured Parties
have any interest in such cash or other property), except as provided in this
paragraph. So long as no Event of Default shall have occurred and be continuing,
the Company will cause, within 10 Business Days following the last day of each
calendar month, all cash and other property held in or credited to the Iridium
Sub-Clearing Account as of such last day to be transferred into the General
Receipt & Disbursement Account. Upon deposit into the General Receipt &
Disbursement Account, such cash and other property may be withdrawn in
accordance with the provisions of Section 4.01(b). If at any time an Event of
Default shall have occurred and be continuing, the Depositary Bank, upon
direction of an Authorized Officer of the Collateral Agent, shall direct the
Company to, and upon receipt of any such direction the Company will, immediately
transfer all cash or other property then held in or credited to the Iridium
Sub-Clearing Account to the General Receipt & Disbursement Account and,
thereafter so long as any Event of Default shall continue, will sweep all cash
and other property on a periodic basis (as directed by the Collateral Agent)
from the Iridium Sub-Clearing Account into the General Receipt & Disbursement
Account.
SECTION 4.02. Loss Proceeds Account.
(a) Deposits into Loss Proceeds Account. The Company agrees, and
will take all necessary action to ensure, that all Loss Proceeds in respect of
each Event of Loss payable to or received by the Company or any of its
Subsidiaries shall be deposited directly into the Loss Proceeds Account.
(b) Disbursements from Loss Proceeds Account.
(i) The Depositary Bank shall, subject to Section 5.04, from time
to time upon instructions of the Collateral Agent transfer the amounts on
deposit in the Loss Proceeds
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Account to the Administrative Agent for application to a prepayment of the
Loans at the times and in the amounts in accordance with Section 2.09(d) of
the Credit Agreement.
(ii) If the Company wishes to apply any Loss Proceeds deposited to
the Loss Proceeds Account to the Restoration of the property affected by an
Event of Loss, the Company shall give written notice thereof to the
Depositary Bank (with a copy to the Collateral Agent) prior to the date 20
Business Days following receipt of such Loss Proceeds by delivering a
certificate of an Authorized Officer of the Company to that effect and
specifying that portion of such Loss Proceeds that the Company intends to
use for such Restoration. Upon receipt of such notice, the Depositary Bank
will segregate in the Restoration Sub-Account such portion of the Loss
Proceeds. Thereafter, the Company shall, upon request to the Depositary
Bank, be permitted to withdraw from time to time all and any portion of
such amounts from the Restoration Sub-Account to make expenditures in
respect of such Restoration. Upon receipt of each such request, the
Depositary Bank shall withdraw and transfer from the Restoration
Sub-Account and shall remit to the Company (or such payee(s) as the Company
shall direct) the amount specified in such request, and (if remitted to the
Company), the Company shall remit to the relevant payees the amounts the
Company receives. Upon completion of such Restoration, the Company shall
advise the Depositary Bank and the Collateral Agent thereof, and the
Depositary Bank shall transfer any portion of such amount remaining in the
Restoration Sub-Account in respect of the relevant Event of Loss to the
Loss Proceeds Account for application to a prepayment of the Loans to the
extent required by Section 2.09(d) of the Credit Agreement or otherwise as
provided in this Section.
(iii) Notwithstanding anything herein to the contrary, any amounts
payable by the Company or any of its Subsidiaries with respect to fees,
costs, taxes or other amounts specified in determining the Net Available
Proceeds of any Event of Loss shall, upon a written request of the Company,
be remitted to the Company for payment to the applicable payee(s) thereof.
For avoidance of doubt, if any such amount is deducted from proceeds to the
Company or any of its Subsidiaries before the receipt thereof, it shall not
be a violation of Section 4.02(a).
SECTION 4.03. Prepayment Account.
(a) Deposits into Prepayment Account. The Company agrees, and will
take all necessary action to ensure, that the following amounts shall be
deposited directly into the Prepayment Account:
(i) all of the Net Available Proceeds of any Disposition (other
than an Excluded Disposition) received by the Company or any of its
Subsidiaries;
(ii) all of the Net Available Proceeds of any Equity Issuance
resulting from the exercise of the Reserve Capital Call Obligations, and
50% of the Net Available Proceeds of any other Equity Issuance (other than
an Excluded Equity Issuance) received by the Company or any of its
Subsidiaries (including, without limitation, all amounts paid (or deemed
paid) by Iridium LLC as a capital contribution in the Company in respect of
the Reserve Capital Call Obligations);
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(iii) 50% of the Net Available Proceeds of any Debt Incurrence
(other than an Excluded Debt Incurrence) received by the Company or any of
its Subsidiaries;
(iv) all proceeds of any Project Document Claim;
(v) Excess Cash Flow which is required to be prepaid pursuant to
Section 2.09(f) of the Credit Agreement; and
(vi) all other amounts collected or received by the Collateral
Agent or by any other Secured Party in respect of any exercise of Security
Agreement Remedies with respect to the Collateral under the Security
Documents.
(b) Disbursements from Prepayment Account.
(i) The Depositary Bank shall, subject to Section 5.04, from time
to time upon instructions of the Collateral Agent transfer the amounts on
deposit in the Prepayment Account to the Administrative Agent for
application to a prepayment of the Loans at the times and in the amounts in
accordance with Section 2.09 of the Credit Agreement.
(ii) Subject to Section 5.04, the Depositary Bank shall, at the
written instructions of an Authorized Officer of the Collateral Agent,
transfer to the General Receipt & Disbursement Account any amounts
deposited in the Prepayment Account to the extent (x) not required to be
applied to the prepayment of outstanding Loans pursuant to Section 2.09 of
the Credit Agreement and (y) not used for the Restoration of property
affected by the relevant Event of Loss or for fees, costs, taxes or other
such amounts, as permitted under Section 4.02(b)(iii), as determined by the
Collateral Agent.
(iii) Notwithstanding anything herein to the contrary, any amounts
payable by the Company or any of its Subsidiaries with respect to fees,
costs, taxes or other amounts specified in determining the Net Available
Proceeds, as the case may be, of any Disposition, Equity Issuance, Debt
Incurrence or Project Document Claim shall, upon the written request of an
Authorized Officer of the Company, be remitted to the Company for payment
to the applicable payee(s) thereof. For avoidance of doubt, if any such
amount is deducted from proceeds to the Company or any of its Subsidiaries
before the receipt thereof, it shall not be a violation of Section 4.03(a).
(iv) Notwithstanding anything herein to the contrary, any amounts
referred to in clause (v) of paragraph (a) above shall be applied to the
payment of the Secured Obligations (as defined in the relevant Security
Documents) in accordance with the terms of the respective Security Document
under which such amounts were received as directed by the Collateral Agent,
and upon receiving such direction the Depositary Bank shall pay such amount
as so directed.
(c) Instructions to Project Parties. The Company hereby
acknowledges that it has irrevocably instructed each Transaction Party that
is a party to each Principal Project Document to make all payments that may
be made to or received by the Company thereunder directly to the Depositary
Bank for deposit into the Prepayment Account and that such payment will be
credited to the Prepayment Account in accordance with the terms of this
Agreement.
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ARTICLE V
OTHER ACCOUNT MATTERS
SECTION 5.01. Remittances to the Company or the Collateral Agent.
(a) In the event that any payments or other amounts required
pursuant to this Agreement to be deposited directly into one of the Accounts are
remitted instead to the Company or any of its Subsidiaries, the Company shall
(or shall cause any such Subsidiary to) promptly remit such payments or other
amounts, in the form received, with any necessary endorsements, to the
Depositary Bank for deposit into the relevant Account as provided herein and,
pending such remittance to the Depositary Bank, the Company shall (or shall
cause any such Subsidiary to) segregate such payments and other amounts from all
other funds of the Company (or such Subsidiary, as the case may be) and hold the
same in trust for the Secured Parties.
(b) In the event that any payments or other amounts required
pursuant to this Agreement to be deposited directly into one of the Accounts are
remitted instead to the Collateral Agent, the Collateral Agent shall promptly
remit such payments or other amounts, in the form received, with any necessary
endorsements, to the Depositary Bank for deposit to the relevant Account as
provided herein.
SECTION 5.02. Right of Withdrawal. Except as specifically set
forth in this Agreement, the Company shall have no right of withdrawal in
respect of any of the Accounts.
SECTION 5.03. Permitted Investments.
(a) Moneys held in any Account shall be invested and reinvested in
Permitted Investments at the written direction (which may be in the form of a
standing instruction) of an Authorized Officer of the Company; provided,
however, that at any time when (i) the Depositary Bank shall have received
written notice from the Collateral Agent that an Event of Default shall have
occurred and be continuing or (ii) an Authorized Officer of the Company has not
timely furnished such a written direction or, after a request by the Depositary
Bank, has not so confirmed a standing instruction to the Depositary Bank, the
Depositary Bank shall invest such moneys only in Permitted Investments described
in clause (e) of the definition thereof that have a maturity of 30 days or less.
Any written direction of an Authorized Officer of the Company with respect to
the investment or reinvestment of moneys held in any Account shall direct
investment or reinvestment only in Permitted Investments. All Permitted
Investments shall be credited to the relevant Account and shall comply with
Section 2.02(b)(v).
(b) Earnings on Permitted Investments held in each Account shall
be deposited upon receipt in the General Receipt & Disbursement Account as
provided in Section 4.01(a).
(c) The Depositary Bank shall have no liability for any loss
resulting from any investment contemplated by this Section other than by reason
of its bad faith, intentional misconduct or gross negligence.
(d) The Depositary Bank may sell or liquidate any Permitted
Investment (without regard to maturity date) whenever the Depositary Bank
reasonably deems it necessary to make
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any deposit, transfer or distribution required by this Agreement (using
reasonable efforts to minimize the costs or losses resulting from such
liquidation), provided that the Depositary Bank shall not be liable to any
Person for any loss suffered because of such sale or liquidation or by any delay
in liquidation other than by reason of its bad faith, intentional misconduct or
gross negligence.
(e) For purposes of any income tax payable on account of any
income or gain on an investment, such income or gain shall be for the account of
the Company.
(f) Each of the parties hereto acknowledges that in connection
with Permitted Investments of the type described in clause (c) of the definition
of "Permitted Investments" for which the Depositary Bank or an affiliate of the
Depositary Bank serves as an investment advisor, administrator, shareholder,
servicing agent and/or custodian or subcustodian (i) the Depositary Bank or an
affiliate of the Depositary Bank charges and collects fees and expenses from
such funds for services rendered, (ii) the Depositary Bank charges and collects
fees and expenses for services rendered pursuant to the standard terms and
conditions and (iii) services performed for such Permitted Investments and
pursuant to the standard terms and conditions may converge at any time. Each of
the parties hereto hereby specifically authorizes the Depositary Bank or an
affiliate of the Depositary Bank to charge and collect all fees and expenses
from such funds for services rendered to such funds, in addition to any fees and
expenses the Depositary Bank may charge and collect for services rendered
pursuant to the standard terms and conditions.
SECTION 5.04. Defaults. Notwithstanding anything contained in this
Agreement to the contrary, upon receiving notice from the Collateral Agent of
the occurrence and during the continuation of an Event of Default, the
Depositary Bank shall accept all notices and instructions required to be given
to the Depositary Bank pursuant to the terms of this Agreement only from the
Collateral Agent and not from any other Person, and, notwithstanding anything
herein to the contrary, the Depositary Bank shall not withdraw, transfer, pay or
otherwise distribute any moneys in any of the Accounts except pursuant to such
notices and instructions from the Collateral Agent (it being understood that,
upon and during the continuance of an Event of Default, the Collateral Agent may
direct any or all of the moneys in the Accounts to be applied to pay when due
any of the Secured Obligations). No amounts from time to time held in each
Account shall constitute payment of any Indebtedness or any other obligation of
the Company until applied as herein provided.
SECTION 5.05. Identification of Amounts. In the event the
Depositary Bank receives moneys without adequate identification or adequate
instruction with respect to the proper Account in which such moneys are to be
deposited, the Depositary Bank shall deposit such moneys into the General
Receipt & Disbursement Account and segregate such moneys from all other amounts
on deposit in the General Receipt & Disbursement Account and notify the Company
of the receipt of such moneys. Upon receipt of instructions of an Authorized
Officer of the Company as to identification of such moneys, the Depositary Bank
shall transfer such moneys from the General Receipt & Disbursement Account to
the Account as so instructed by the Company.
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SECTION 5.06. Other Transfers. If at any time any amount required
hereby to be deposited into a particular Account is deposited into another
Account, the Depositary Bank shall have the right to transfer such amount to the
proper Account.
SECTION 5.07. Account Balance Statements. The Depositary Bank
shall, on a monthly basis, provide to the Collateral Agent and the Company,
account statements in respect of each of the Accounts, sub-accounts and amounts
segregated in any of the Accounts or sub-accounts. Such account statement shall
also include deposits, withdrawals and transfers from and to each Account and
sub-account and any segregated amounts. At such other times as the Collateral
Agent or the Company may from time to time reasonably request (but not more
frequently than once each week unless an Event of Default shall have occurred
and is continuing), the Depositary Bank shall provide written informal account
information regarding (a) cash and other items credited to each of the Accounts,
sub-accounts and, to the extent reasonably available, amounts segregated in any
of the Accounts or sub-accounts and (b) deposits, withdrawals and transfers from
and to any Account, sub-account and, to the extent reasonably available,
segregated amounts.
ARTICLE VI
THE DEPOSITARY BANK
SECTION 6.01. Tax Identification. The Company shall on the
signature page of this Agreement provide the Depositary Bank with its Tax
Identification Number (TIN) as assigned by the Internal Revenue Service. All
interest or other income earned hereunder shall be allocated and paid as
provided herein and reported by the recipient to the Internal Revenue Service as
having been so allocated and paid.
SECTION 6.02. Action.
(a) The Depositary Bank may rely and shall be protected in acting
or refraining from acting upon any written notice, instruction or request
furnished to it hereunder (or, as contemplated in this Agreement, any telephonic
notice, instruction or request) and believed by it to be genuine and to have
been signed or presented by an Authorized Officer of the proper party or
parties. The Depositary Bank shall be under no duty to inquire into or
investigate the validity, accuracy or content of any such notice, instruction or
request. The Depositary Bank shall have no duty to solicit any payments which
may be due it hereunder.
(b) The Depositary Bank shall not be liable for any action taken
or omitted by it in good faith unless a court of competent jurisdiction
determines that the Depositary Bank's gross negligence, intentional misconduct
or bad faith was the primary cause of any loss to any such party. In the
administration of the Accounts hereunder, the Depositary Bank may execute any of
its powers and perform its duties hereunder directly or through agents or
attorneys and may consult with counsel, accountants and other skilled persons to
be selected and retained by it. The Depositary Bank shall not be liable for
anything done, suffered or omitted in good faith by it in accordance with the
advice or opinion of any such counsel, accountants or other skilled persons.
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(c) The duties and responsibilities of the Depositary Bank
hereunder shall be determined solely by the express provisions of this
Agreement, and no other or further duties or responsibilities shall be implied.
The Depositary Bank shall not have any liability under, nor duty to inquire into
the terms and provisions of, any agreement or instructions, other than as
provided in the Agreement.
(d) In the event that the Depositary Bank shall be uncertain as to
its duties or rights hereunder or shall receive notice, instructions or requests
from any party hereto which, in its opinion, conflict with any of the provisions
of this Agreement, it shall be entitled to refrain from taking any action and
its sole obligation shall be to keep safely all property held by it until it
shall be directed otherwise in writing by all of the other parties hereto or by
a final order or judgment of a court of competent jurisdiction.
SECTION 6.03. Resignation. Subject to the appointment and
acceptance of a successor Depositary Bank, the Depositary Bank may resign and be
discharged from its duties or obligations hereunder by giving notice in writing
to the Collateral Agent and the Company of such resignation specifying a date
when such resignation shall take effect. Upon receipt of such notice, the
Collateral Agent shall have the right to designate a successor Depositary Bank
which shall be a Lender and a bank with an office in New York, New York and a
combined capital and surplus of at least $500,000,000, with the prior consent of
the Company (which consent shall not be unreasonably withheld). If no successor
shall have been so designated and shall have accepted such designation within 30
days of the retiring Depositary Bank's giving notice of such resignation, the
retiring Depositary Bank may appoint its successor provided such appointed
successor is a Lender and a bank with an office in the New York, New York with a
combined capital surplus of at least $500,000,000. Upon acceptance by a
successor Depositary Bank of its appointment hereunder, the retiring Depositary
Bank shall be discharged from its duties and obligations hereunder. In
connection with its resignation hereunder, the Depositary Bank shall have the
right to withhold an amount equal to the amount due and owing to the Depositary
Bank plus any costs and expenses the Depositary Bank shall reasonably believe
may be incurred by the Depositary Bank in connection with its resignation. Upon
the acceptance of any appointment as Depositary Bank hereunder by the successor
Depositary Bank, (a) such successor Depositary Bank shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Depositary Bank, and the retiring Depositary Bank shall be discharged
from its duties and obligations hereunder and (b) the retiring Depositary Bank
shall promptly transfer all Accounts within its possession or control to the
possession or control of the successor Depositary Bank and shall execute and
deliver such notices, instructions and assignments as may be necessary or
desirable to transfer the rights of the Depositary Bank with respect to the
Accounts to the successor Depositary Bank.
SECTION 6.04. Compensation. The Company hereby agrees to (i) pay
the Depositary Bank upon execution of this Agreement reasonable compensation for
the services to be rendered hereunder, as described in a written schedule
provided from time to time by the Depositary Bank to the Company and (ii) pay or
reimburse the Depositary Bank upon request for all expenses, disbursements and
advances, including reasonable attorney's fees, incurred or made by it in
connection with the preparation, execution, performance, delivery modification,
and termination of this Agreement.
Depositary Agreement
<PAGE> 249
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SECTION 6.05. Indemnification. The Company hereby agrees to
indemnify the Depositary Bank for, and to hold it harmless against, any loss,
liability or expense arising out of or in connection with this Agreement and
carrying out its duties hereunder, including the costs and expenses of defending
itself against any claim of liability, except for costs and expenses resulting
from the gross negligence, intentional misconduct or bad faith of the Depositary
Bank. Anything in this Agreement to the contrary notwithstanding, in no event
shall the Depositary Bank be liable for special, indirect or consequential loss
or damage of any kind whatsoever (including but not limited to lost profits),
even if the Depositary Bank has been advised of the likelihood of such loss or
damage and regardless of the form of action.
SECTION 6.06. Transfer Instructions.
(a) In the event funds transfer instructions are given, whether in
writing, by telecopier or otherwise, the Depositary Bank is authorized to seek
confirmation of such instructions by telephone call-back to an Authorized
Person, and the Depositary Bank may rely upon the confirmations of anyone
purporting to be the person or persons so designated. The persons and telephone
numbers for call-backs may be changed only in a writing actually received and
acknowledged by the Depositary Bank. The parties to this Agreement acknowledge
that such security procedure is commercially reasonable.
(b) It is understood that, with respect to any funds transfer, the
Depositary Bank may rely solely upon any account numbers or similar identifying
number provided by either of the other parties hereto to identify (i) the
intended payee, (ii) such payee's bank, or (iii) an intermediary bank through
which such funds transfer is to be made. The Depositary Bank may apply any of
the funds for any payment order it executes using any such identifying number,
even where its use may result in a person other than the intended payee being
paid, or the transfer of funds to a bank other than the intended payee's bank or
an intermediary bank designated.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. No Waiver. No failure on the part of the Collateral
Agent or any of its agents to exercise and no delay in exercising, and no course
of dealing with respect to, any right, power or remedy hereunder shall operate
as a waiver thereof, and no single or partial exercise by the Collateral Agent
or any of its agents of any right, power or remedy hereunder shall preclude any
other or further exercise thereof or the exercise of any other right, power or
remedy. The remedies provided herein are cumulative and are not exclusive of any
remedies provided by law.
SECTION 7.02. Notices. All notices, requests and other
communications provided for herein (including, without limitation, any
modifications of, or waivers or consents under, this Agreement) shall be given
or made in writing (including, without limitation, by telex or telecopy) and
delivered (a) if to the Depositary Bank, the Company or the Collateral Agent, at
the "Address for Notices" specified beneath its name on the signature page
hereof or (b) as to any
Depositary Agreement
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party, at such other address as shall be designated by such party in a notice to
each other party. Except as otherwise provided in this Agreement, all such
communications shall be deemed to have been duly given when transmitted by telex
or telecopier or personally delivered or, in the case of a mailed notice, upon
receipt, in each case given or addressed as aforesaid.
SECTION 7.03. Amendments, Etc. The terms of this Agreement may be
waived, altered or amended only by an instrument in writing duly executed by the
Company, the Collateral Agent and the Depositary Bank. Any such amendment or
waiver shall be binding upon the Collateral Agent, each other Secured Party and
the Company.
SECTION 7.04. Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the respective successors and assigns
of the Company, the Collateral Agent and the Depositary Bank; provided, however,
that the Company shall not assign or transfer its rights hereunder without the
prior written consent of the Collateral Agent.
SECTION 7.05. Captions. The caption and section headings used
herein are for convenience of reference only, are not part of this Agreement and
shall not affect the construction of, or be taken into consideration in
interpreting, this Agreement.
SECTION 7.06. Counterparts. This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract.
SECTION 7.07. Governing Law. This Agreement shall be construed in
accordance with and governed by the law of the State of New York, except as
required by mandatory provisions of law and except to the extent that the
validity or perfection of the lien and security interest hereunder, or the
remedies hereunder, are governed by the law of any jurisdiction other than the
State of New York. Regardless of any provision in any other agreement, for
purposes of the UCC, the "securities intermediary's jurisdiction" of the
Depositary Bank with respect to the Accounts is the State of New York.
SECTION 7.08. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 7.09. No Third Party Beneficiaries. The agreements of the
parties hereto are solely for the benefit of the Company, the Collateral Agent,
the Depositary Bank and the other Secured Parties, and no other Person
(including, without limitation, any other Credit
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<PAGE> 251
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Party, any contractor, subcontractor, supplier or materialman furnishing
supplies, goods or services to or for the benefit of the Project or any other
creditor of the Company or any of its Subsidiaries) shall have any rights
hereunder.
SECTION 7.10. Agents and Attorneys-in-Fact. The Collateral Agent
may employ agents and attorneys-in-fact in connection herewith and shall not be
responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it in good faith.
SECTION 7.11. Severability. Any provision of this Agreement held
to be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 7.12. Reinstatement. This Agreement and any Lien created
hereunder shall automatically be reinstated if and to the extent that for any
reason any payment by or on behalf of the Company in respect of the Secured
Obligations is rescinded or must otherwise be restored by any holder of the
Secured Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise.
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<PAGE> 252
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IN WITNESS WHEREOF, the parties hereto have caused this Deposit,
Disbursement and Account Control Agreement to be duly executed and delivered as
of the day and year first above written.
IRIDIUM OPERATING LLC
By
-------------------------------
Name:
Title:
Address for Notices:
Iridium Operating LLC
1575 Eye Street, N.W.,
Suite 800
Washington, D.C. 20005
Attention: General Counsel
(Telecopy No.: 202-408-3761)
Tax Identification No.: 52-206-6319
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THE CHASE MANHATTAN BANK,
as Collateral Agent
By
--------------------------
Name:
Title:
Address for Notices:
The Chase Manhattan Bank
Loan and Agency Services Group
1 Chase Manhattan Plaza
8th Floor
New York, New York 10081
Attention: Winslowe Ogbourne
Telecopier: (212) 552-5700
Depositary Agreement
<PAGE> 254
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THE CHASE MANHATTAN BANK,
as Depositary Bank
By
----------------------------
Name:
Title:
Address for Notices:
450 West 33rd Street
15th Floor
New York, New York 10001
Attention: Corporate Trust
Telephone: 212-946-3013
Telecopier: 212-946-8177/8178
Depositary Agreement
<PAGE> 255
EXHIBIT G
[FORM OF MOTOROLA CONSENT]
MOTOROLA CONSENT
CONSENT AND AGREEMENT dated as of December __, 1998 among:
MOTOROLA, INC., a Delaware corporation ("Motorola"); IRIDIUM OPERATING LLC, a
Delaware limited liability company ("Iridium"); and THE CHASE MANHATTAN BANK
("Chase"), as administrative agent for the lenders or other financial
institutions or entities party, as lenders, to the Secured Credit Agreement
referred to below (the "Lenders") (in such capacity, together with its
successors in such capacity, the "Administrative Agent"), and as collateral
agent for the Lenders under the Security Documents (in such capacity, together
with its successors in such capacity, the "Collateral Agent").
Iridium, certain lenders (each, a "Lender" and, collectively, the
"Lenders"), the Collateral Agent, Chase Securities Inc. and Barclays Bank PLC,
as Global Lead Arrangers (collectively, the "Global Lead Arrangers"), the
Administrative Agent, and Barclays Bank PLC as the Documentation Agent are
parties to a certain Senior Secured Credit Agreement dated as of December 23,
1998 (as amended and modified and in effect from time to time, the "Secured
Credit Agreement"), providing, subject to the terms and conditions thereof, for
loans to be made by the Lenders to Iridium in an aggregate principal amount not
exceeding $800,000,000.
To induce the Lenders to enter into the Secured Credit Agreement
and to extend credit thereunder, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Motorola and
Iridium have agreed to enter into this Agreement, and Motorola has agreed to
enter into the Motorola Pledge Agreement, for the benefit of the Agents and the
Lenders. Accordingly, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions and Other Terms. Capitalized terms used
herein and not otherwise defined herein shall have the meanings assigned thereto
in the Secured Credit Agreement. As used herein, the following terms shall have
the following meanings (all terms defined in this Section or in other provisions
of this Agreement to have the same meanings when used in the plural and vice
versa):
"FCC License" means the authorization granted by the FCC in
respect of the construction, launch and operation of the Iridium System, as set
forth in the FCC's Orders and Authorizations DA 95-131, released January 31,
1995, DA 95-372, released February 28, 1995, FCC 96-279, released June 27, 1996
and DA 96-1789, released October 30, 1996.
"Material Motorola Domestic Subsidiary" means, at any time, any
Motorola Domestic Subsidiary that as of such time meets the definition of a
"significant subsidiary" contained as of the date hereof in Regulation S-X of
the SEC.
Motorola Consent
<PAGE> 256
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"Motorola Assigned Agreements" means, collectively, (a) the Space
System Contract, (b) the Terrestrial Network Development Contract, (c) the O&M
Contract and (d) the MOU Agreements.
"Motorola Domestic Subsidiary" means any Subsidiary of Motorola,
except any such Subsidiary (a) that neither transacts any substantial business
nor regularly maintains any substantial portion of its fixed assets within the
United States of America or (b) which is engaged primarily in financing
operations of Motorola or its Subsidiaries outside the United States of America.
"Motorola Subordinated Claims" means (a) Iridium's financial
obligations in respect of any and all claims and rights by Motorola against
Iridium arising as a result of Motorola's performance of its obligations under
any guarantee issued by Motorola in respect of Indebtedness of Iridium permitted
under Section 7.01(a), (b), (c),(d) or (k) of the Secured Credit Agreement
(including, without limitation, (i) the Guarantee Agreement executed and
delivered by Motorola in connection with the Motorola Guaranteed Credit
Agreement and (ii) the Motorola Guarantee), whether by subrogation,
contribution, reimbursement or otherwise, and including, without limitation, any
and all monetary obligations owing by Iridium in respect of any of the foregoing
under the MOU Agreements (but excluding, for avoidance of doubt, the obligations
under the Agreement Regarding Guarantee relating to compensation in the form of
equity interests of Iridium LLC or IWCL or warrants therefor), and (b) any and
all obligations owing by Iridium to Motorola in respect of any Motorola Vendor
Financing (other than with respect to amounts covered by clause (c) of the
definition of Motorola Vendor Financing in the Secured Credit Agreement).
"Secured Credit Agreement" has the meaning assigned to such term
in the preamble of this Agreement.
"Secured Credit Documents" means the Senior Credit Agreement and
any and all guarantees, security agreements, pledge agreements, mortgages, and
other instruments and agreements providing for or evidencing Senior Bank Debt,
in each case as modified or supplemented and in effect from time to time.
"Security Agreement Remedies" mean the remedies of the Collateral
Agent under the Security Agreement.
"Senior Bank Debt" means the following obligations of Iridium:
(a) all principal of the loans outstanding under the Secured
Credit Agreement, all interest thereon (including any interest accruing
after the date of any filing by Iridium of any petition in bankruptcy or
the commencing of any bankruptcy, insolvency or similar proceedings with
respect to Iridium whether or not the same is allowed as a claim in any
such proceeding) and all other amounts outstanding under the Secured
Credit Agreement and the other Secured Credit Documents, including,
without limitation, all expenses, indemnities, premiums, penalties and
fees payable by Iridium from time to time thereunder;
Motorola Consent
<PAGE> 257
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(b) all obligations of Iridium owing from time to time to any
holder of Senior Bank Debt of the type described in clause (a) above, or
any refinancing, replacement or refunding thereof permitted under clause
(c) below, in respect of any Hedging Agreement entered into between
Iridium and such holder (or any Affiliate thereof); and
(c) any and all refinancings, replacements or refundings of any
or all of the foregoing amounts effected through one or more secured
credit facilities having a maturity not later than July 15, 2005 and
(together with all other secured debt for borrowed money of Iridium) not
exceeding $1,700,000,000 in aggregate principal amount.
"Senior Bank Debt Representative" means (a) the Administrative
Agent from time to time under the Secured Credit Agreement (which, as of the
date hereof, is Chase) and (b) at any time following the refinancing,
replacement or refunding of the Secured Credit Agreement, the entity acting in
the capacity as administrative agent for the lenders (or exercising the
equivalent functions) under such refinancing, replacement or refunding.
"Senior Credit Agreement" means the Secured Credit Agreement
and/or any refinancing, refunding, extension or renewal thereof, whether in
whole or part and whether or not with any of the lenders then party to the
outstanding Senior Credit Agreement, in each case as amended or modified and in
effect from time to time.
"Space Segment" has the definition provided in the Space System
Contract.
"SSL" means Space System License, Inc., a direct wholly owned
Subsidiary of Motorola.
"Subsidiary" means, with respect to any Person, any corporation,
partnership, limited liability company or other entity of which at least a
majority of the securities or other ownership interests having by the terms
thereof ordinary voting power to elect a majority of the board of directors or
other persons performing similar functions of such corporation, partnership,
limited liability company or other entity (irrespective of whether or not at the
time securities or other ownership interests of any other class or classes of
such corporation, partnership, limited liability company or other entity shall
have or might have voting power by reason of the happening of any contingency)
is at the time directly or indirectly owned or controlled by such Person or one
or more Subsidiaries of such Person or by such Person and one or more
Subsidiaries of such Person. Notwithstanding the foregoing, in no event shall
Iridium be a Subsidiary of Motorola.
SECTION 1.02. Terms Generally. The definitions of terms herein
shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
The word "will" shall be construed to have the same meaning and effect as the
word "shall". Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or
Motorola Consent
<PAGE> 258
-4-
otherwise modified, including an amendment and restatement thereof, but subject
to any restrictions on such amendments, supplements or modifications set forth
herein, (b) any reference herein to any Person shall be construed to include
such Person's successors and assigns or, in the case of any Governmental
Authority, any successor or other entity that performs equivalent functions in
whole or in part, (c) the words "herein", "hereof" and "hereunder", and words of
similar import, shall be construed to refer to this Agreement in its entirety
and not to any particular provision hereof, (d) all references herein to
Articles, Sections and Schedules shall be construed to refer to Articles and
Sections of, and Schedules to, this Agreement and (e) the words "asset" and
"property" shall be construed to have the same meaning and effect and to refer
to any and all tangible and intangible assets and properties, including cash,
securities, accounts and contract rights.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Motorola represents and warrants to the Lenders and the Agents
that:
SECTION 2.01. Corporate Existence. Motorola (a) is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware; (b) has all requisite corporate or other power, and has all
material governmental licenses, authorizations, consents and approvals
necessary, to own its assets and carry on its business as now being or as
proposed to be conducted; and (c) is qualified to do business and is in good
standing in all jurisdictions in which the nature of the business conducted by
it makes such qualification necessary and where failure so to qualify could
reasonably be likely to (either individually or in the aggregate) have a
material adverse effect on the ability of Motorola to perform any of its
obligations under the Credit Documents and the Principal Project Documents to
which it is a party.
SECTION 2.02. Financial Condition. Motorola has heretofore
furnished to each of the Lenders the consolidated balance sheet of Motorola and
its consolidated Subsidiaries as at December 31, 1997 and the related statements
of consolidated earnings, stockholders' equity and cash flows of Motorola and
its consolidated Subsidiaries for the fiscal year ended on said date, with the
opinion thereon of KPMG Peat Marwick LLP, and the unaudited consolidated balance
sheet of Motorola and its Subsidiaries as at the end of the third fiscal quarter
of Motorola's 1998 fiscal year and the related statements of consolidated
earnings, stockholders' equity and cash flows of Motorola and its consolidated
Subsidiaries for the nine-month period ended on such date. All such financial
statements present fairly, in all material respects, the financial condition of
Motorola and its consolidated Subsidiaries as at said dates and the results of
their operations for the fiscal year and nine-month period ended on said dates
(subject, in the case of such financial statements as at the end of such
nine-month period to normal year-end audit adjustments), all in conformity with
generally accepted accounting principles. Since December 31, 1997, there has
been no material adverse change in the consolidated business, operations or
financial condition taken as a whole of Motorola and its consolidated
Subsidiaries from that set forth in said financial statements as at said date.
Motorola Consent
<PAGE> 259
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SECTION 2.03. Litigation. Except as disclosed in Motorola's
Report on Form 10-K filed with the SEC for the fiscal year ended December 31,
1997 or in Motorola's Reports on Form 10-Q filed with the SEC during 1998 prior
to the date hereof, each of which has been delivered to the Lenders prior to the
date hereof, there are no legal or arbitral proceedings, or any proceedings by
or before any governmental or regulatory authority or agency, now pending or (to
the knowledge of Motorola) threatened against Motorola or any of the Material
Motorola Domestic Subsidiaries which if adversely determined, (either
individually or in the aggregate) could reasonably be likely to have a material
adverse effect on the ability of Motorola to perform any of its obligations
under the Credit Documents and the Principal Project Documents to which it is a
party.
SECTION 2.04. No Breach. None of the execution and delivery of
any of the Motorola Agreements, the consummation of the transactions
contemplated thereby or compliance with the terms and provisions thereof will
conflict with or result in a breach of, or require any consent under, the
charter or by-laws of Motorola, or any applicable law or regulation or any
order, writ, judgment, decree, determination or award having applicability to
Motorola or any of its Subsidiaries, or any agreement or instrument to which
Motorola or any of the Material Motorola Domestic Subsidiaries is a party, or by
which any of them or any of their respective property is bound or to which any
of them is subject, or constitute a default under any such agreement or
instrument.
SECTION 2.05. Action. Motorola has all necessary corporate power,
authority and legal right to execute, deliver and perform each of its
obligations under the Motorola Agreements and the Motorola Assigned Agreements.
The execution, delivery and performance by Motorola of each of the Motorola
Agreements and the Motorola Assigned Agreements, and the consummation of the
transactions contemplated thereby, have been duly authorized by all necessary
corporate action on its part. Each of the Motorola Agreements and the Motorola
Assigned Agreements has been duly and validly executed and delivered by Motorola
and constitutes its legal, valid and binding obligation, enforceable against it
in accordance with its respective terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws of
general applicability affecting the enforcement of creditors' rights.
SECTION 2.06. Approvals. No authorizations, approvals or consents
of, and no filings or registrations with, any governmental or regulatory
authority or agency, any securities exchange or any other Person are necessary
for the execution, delivery or performance by Motorola of any of the Motorola
Agreements or the Motorola Assigned Agreements or for the legality, validity or
enforceability hereof or thereof, except that the exercise of remedies under the
Motorola Pledge Agreement may require prior approval of the FCC.
SECTION 2.07. Motorola Assigned Agreements. As of the date
hereof, Motorola is not in default under any of its material covenants or
obligations under the Motorola Assigned Agreements and each of the Motorola
Assigned Agreements is in full force and effect. Iridium or Motorola has
furnished to the Administrative Agent true and complete copies of each of the
Motorola Assigned Agreements as in effect on the date hereof. As of the date
hereof, no event or condition exists which would either immediately or with the
passage of any applicable grace period or giving of notice, or both, enable
Motorola to terminate, or suspend performance
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of its obligations under, any of the Motorola Assigned Agreements, except (i)
for amounts to be paid to Motorola contemporaneously with the initial loans
under the Secured Credit Agreement and the Motorola Guaranteed Credit Agreement
and (ii) as identified in Schedule 1.
SECTION 2.08 No Motorola Default. No Motorola Default has
occurred and is continuing.
SECTION 2.09 FCC License. The FCC License is validly issued, as
of the date hereof in the name of, and at all times prior to the transfer
thereof to Iridium pursuant to the Space System Contract will be held by, SSL.
Except as described in Schedule 2, the FCC License is a final and non-appealable
order of the FCC and in full force and effect, and Motorola is in compliance
with all material terms and conditions applicable to, or set forth in, the FCC
License and with all material provisions of any Government Rule applicable
thereto. Except as set forth in Schedule 2, there is not now pending or, to the
knowledge of Motorola, threatened any petition, complaint, objection (whether
formal or informal), investigation, or any other proceeding before the FCC or
any other Government Authority of competent jurisdiction relating to the FCC
License or the Iridium System.
ARTICLE III
CONSENT AND AGREEMENT
Motorola hereby acknowledges and agrees:
SECTION 3.01. Consent to Assignment. Motorola hereby acknowledges
notice and receipt of the Security Agreement and consents to the assignment by
Iridium of all its rights in and under each of the Motorola Assigned Agreements
pursuant to the Security Agreement and any and all moneys payable by Motorola to
Iridium under any of the Motorola Assigned Agreements.
SECTION 3.02. Exercise of Iridium Rights. In connection with any
exercise by the Collateral Agent of the Security Agreement Remedies, the
Collateral Agent shall be entitled to exercise any and all rights of Iridium
under each of the Motorola Assigned Agreements in accordance with their
respective terms, and Motorola shall comply in all respects with such exercise.
Without limiting the foregoing, in connection with the exercise by the
Collateral Agent of the Security Agreement Remedies, the Collateral Agent shall
have the full right and power to enforce directly against Motorola all
obligations of Motorola owing to Iridium under each Motorola Assigned Agreement
and otherwise to exercise all remedies of Iridium thereunder and to make all
demands and give all notices and make all requests required or permitted to be
made by Iridium under each Motorola Assigned Agreement. The Collateral Agent
shall have the right, but not the obligation, to cure all defaults of Iridium
and to pay all sums owing by Iridium under any Motorola Assigned Agreement in
accordance with this Agreement.
SECTION 3.03. Actions Affecting the Motorola Assigned Agreements.
Motorola will not, without the prior written consent of the Collateral Agent,
(i) cancel or terminate, or suspend performance under, or exercise any right to
consent to or accept any cancellation, termination or suspension of, any
Motorola Assigned Agreement, unless prior
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thereto Motorola shall have delivered to the Collateral Agent written notice
stating that it intends to take such action on a date not less than 30 days
after the date of such notice, specifying the nature of the default or other
event under such Motorola Assigned Agreement entitling Motorola to take such
action (and, in the case of a payment default by Iridium, specifying the amount
thereof) and permitting the Collateral Agent to cure such payment default by
making a payment equal to the amount in default or by performing or causing to
be performed any other obligation in default, (ii) transfer, sell, assign,
delegate or otherwise dispose of any part of its interests in any Motorola
Assigned Agreement or (iii) petition, request or take any other legal or
administrative action which seeks, or may reasonably be expected, to rescind,
terminate, suspend, amend or modify any Motorola Assigned Agreement or any part
thereof. In furtherance of clause (i) of the immediately preceding sentence,
Motorola agrees that, notwithstanding anything contained in any Motorola
Assigned Agreement to the contrary, upon the occurrence of a default by Iridium
under such Motorola Assigned Agreement entitling Motorola to cancel or terminate
such Motorola Assigned Agreement or to suspend performance thereunder, Motorola
will not take any action to cancel or terminate, or suspend performance under,
such Motorola Assigned Agreement if, within a 30-day period after the date on
which the Collateral Agent shall have received notice of such default from
Motorola, the Collateral Agent commences steps to cure such default and/or
otherwise to institute enforcement proceedings to acquire Iridium's interest in
such Motorola Assigned Agreement or the Iridium Business and thereafter the
Collateral Agent diligently pursues such steps or proceedings and all payment
defaults of Iridium under such Motorola Assigned Agreement have been cured
within such 30-day period. Effective upon any transfer of Iridium's interest in
such Motorola Assigned Agreement to any other Person, Motorola will grant the
relevant transferee a reasonable period of time to cure such default (but, in no
event with respect to any payment default, exceeding a maximum of 30 days after
receipt of notice of such payment default by the Collateral Agent, as
contemplated above). Except as provided in Section 3.05, no curing or attempt to
cure any of Iridium's defaults under any Motorola Assigned Agreement shall be
construed as an assumption by the Collateral Agent or any other Secured Party of
any covenants, agreements or obligations of Iridium under such Motorola Assigned
Agreement and neither the Collateral Agent nor any other Secured Party shall
have any obligation to Motorola for the performance of any obligation under any
Motorola Assigned Agreement. In connection with any cure pursuant to this
Section of Iridium's default(s) under any Motorola Assigned Agreement or any
assumption by any Person of Iridium's liabilities thereunder, only those
obligations and liabilities arising expressly under such Motorola Assigned
Agreement shall be required to be cured or assumed, as the case may be.
Notwithstanding anything in this Agreement to the contrary, no provision of this
Agreement shall be intended to restrict in any way any merger or consolidation
to which Motorola is a party or the sale of all or substantially all of the
assets of Motorola and its Subsidiaries, provided that in connection with any
such transaction in which Motorola is not the surviving entity of such
transaction, the surviving entity or purchaser, as the case may be, expressly
assumes in writing the obligations of Motorola under the Motorola Assigned
Agreements and the Motorola Agreements, as applicable. Nothing in this Section
3.03 shall be construed to (i) apply to any termination of all or part of a
Motorola Assigned Agreement upon expiration of its scheduled terms, or upon
completion or full performance of the matters covered thereby or (ii) prevent
any amendment or modification of the terms of any of the Motorola Assigned
Agreements to the extent not prohibited by clause (iii) of the first sentence of
this Section.
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SECTION 3.04. Notices. Motorola shall deliver to the
Administrative Agent at the address provided for in Section 11.01 of the Secured
Credit Agreement, or at such other address as the Administrative Agent may
designate in writing from time to time to Motorola, promptly following the
delivery thereof to Iridium, a copy of each notice from Motorola to Iridium
under any Motorola Assigned Agreement of default, termination, arbitration,
force majeure or any event giving rise to a right to terminate or cancel such
Motorola Assigned Agreement or suspend performance thereunder or of any
indemnity payment to be made by Iridium which is in an amount of at least
$2,000,000. Promptly following its receipt thereof, Motorola will deliver to the
Administrative Agent at the address specified above a copy of each notice from
Iridium to Motorola under any Motorola Assigned Agreement of default,
termination, arbitration or force majeure or of any indemnity payment to be made
by Motorola which is in an amount of at least $2,000,000. Notwithstanding
anything herein to the contrary, Motorola shall not be liable for any failure to
provide, or delay in providing, any notice or other information to the
Collateral Agent under this Section.
SECTION 3.05. Successor to Iridium's Rights. Motorola agrees
that, in connection with the exercise by the Collateral Agent of the Security
Agreement Remedies with respect to any Motorola Assigned Agreement, Motorola
shall recognize the Collateral Agent as Iridium for purposes of such Motorola
Assigned Agreement in accordance with this Agreement. In the event that the
Collateral Agent succeeds to Iridium's interests under any Motorola Assigned
Agreement in accordance with the Security Agreement, the Collateral Agent shall
assume liability for all of Iridium's obligations under such Motorola Assigned
Agreement, provided, however, that such liability shall not include any
liability for claims of Motorola against Iridium arising from Iridium's failure
to perform during the period prior to the Collateral Agent's succession to
Iridium's interests under such Motorola Assigned Agreement other than the
payments obligations of Iridium expressly provided for in such Motorola Assigned
Agreement. Except as otherwise set forth in the immediately preceding sentence,
none of the Secured Parties shall be liable for the performance or observance or
any of the obligations or duties of Iridium under any of the Motorola Assigned
Agreements, nor shall the assignment of the Motorola Assigned Agreements by
Iridium to the Collateral Agent pursuant to the Security Agreement give rise to
any duties or obligations whatsoever on the part of any of the Secured Parties
owing to Motorola. If the Collateral Agent succeeds to Iridium's interests under
any Motorola Assigned Agreement pursuant to the Security Agreement, Motorola and
the Collateral Agent shall negotiate in good faith an equitable adjustment to
the milestone and/or scheduled completion dates and/or the prices or amounts
payable thereunder to compensate Motorola for any additional costs reasonably
and necessarily incurred by Motorola following the failure of Iridium to perform
its obligations that resulted in the enforcement by the Collateral Agent of the
Security Agreement Remedies until the date on which the Collateral Agent shall
have assumed the obligations of Iridium under such Motorola Assigned Agreement.
Notwithstanding the foregoing, Motorola shall not be relieved of its obligations
to perform under any Motorola Assigned Agreement as a result of the parties'
failure to agree upon an equitable adjustment to the milestone and/or scheduled
completion dates and/or the prices or amounts payable thereunder and such
failure shall be subject to resolution in accordance with the dispute resolution
procedures set forth in such Motorola Assigned Agreement.
SECTION 3.06. Iridium Bankruptcy. In the event that (i) any
Motorola Assigned Agreement is rejected by a trustee, liquidator,
debtor-in-possession or similar entity or person in
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any bankruptcy, insolvency or other similar proceeding involving Iridium or (ii)
any Motorola Assigned Agreement is terminated as a result of any bankruptcy,
insolvency or similar proceeding involving Iridium and, if within 90 days after
such rejection, the Collateral Agent shall so request and shall certify in
writing to Motorola that it intends to perform the obligations of Iridium as and
to the extent required under such Motorola Assigned Agreement (as if it had not
been rejected or terminated, but otherwise only to the extent such obligations
would be undertaken had such person or entity succeeded to Iridium thereunder
pursuant to Section 3.07), Motorola will execute and deliver to the Collateral
Agent a new agreement amending or replacing the original affected Motorola
Assigned Agreement which shall be for the balance of the remaining term under
such affected Motorola Assigned Agreement before giving effect to such rejection
or termination and shall contain the same conditions, agreements, terms,
provisions and limitations as such affected Motorola Assigned Agreement (except
for any requirements which have been fulfilled by Iridium and Motorola prior to
such rejection or termination or which are not required to be undertaken by such
person or entity). If the Collateral Agent and Motorola enter into such a new
agreement in accordance with this Section, Motorola and the Collateral Agent
shall negotiate in good faith an equitable adjustment to the milestone and/or
scheduled completion dates and/or the prices or amounts payable thereunder to
compensate Motorola for any additional costs reasonably and necessarily incurred
by Motorola during the period from and including the date such bankruptcy,
insolvency or similar proceeding was commenced to and including the date on
which the Collateral Agent shall certify in writing that it intends to perform
the obligations of Iridium with respect to such new agreement. Notwithstanding
the foregoing provisions, Motorola shall not be relieved of its obligations to
perform under such new agreement as result of the parties' failure to agree upon
an equitable adjustment to the milestone and/or scheduled completion dates and
such failure shall be subject to resolution in accordance with the disputes
resolution procedures set forth therein. References in this Agreement to a
"Motorola Assigned Agreement" shall be deemed also to refer to the new Motorola
Assigned Agreement in replacement thereof.
SECTION 3.07. Transferees. In connection with the exercise by the
Collateral Agent of the Security Agreement Remedies, the Collateral Agent may
assign its rights and interests and the rights and interests of Iridium under
any or all of the Motorola Assigned Agreements to any other Person, provided
that such Person shall assume all of the obligations of Iridium under such
Motorola Assigned Agreement(s) and shall have obtained all Government Approvals
(if any) necessary to perform such obligations. Upon such assignment and
assumption, the Collateral Agent shall be relieved of all obligations (if any)
under such Motorola Assigned Agreement(s) arising after such assignment and
assumption. In the event that the Collateral Agent or its designee or any
transferee of the interests of the Collateral Agent in any or all of the
Motorola Assigned Agreements or otherwise in respect of the Iridium Business
shall assume or be liable under any of the Motorola Assigned Agreements (as
contemplated in Section 3.05 or 3.06), liability in respect of any and all
obligations of any such party under such Motorola Assigned Agreement shall be
limited solely to such party's interest in the Iridium Business (and any
officer, director, employee, shareholder or agent thereof shall have no
liability with respect thereto).
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SECTION 3.08. Motorola Guarantee Obligations.
(a) At any time after the occurrence and during the continuation
of any Event of Default, the Collateral Agent shall have the right to exercise
all rights, powers and remedies of Iridium under the MOU Agreements (subject to
the applicable terms and conditions thereof), including without limitation the
right to require Motorola to provide the Motorola Guarantee in a maximum amount
of $300,000,000 pursuant to Section 1(e) of the Memorandum of Understanding (but
only to the extent Motorola shall not have theretofore performed thereunder).
Motorola agrees that the Collateral Agent may exercise such rights, powers
and/or remedies directly against Motorola under such circumstances, and, so long
as any Event of Default shall be continuing and Motorola has received written
notice thereof from the Collateral Agent, Motorola agrees that it shall not
recognize the exercise by Iridium of any such right, power or remedy without the
prior written consent of the Collateral Agent.
(b) Without limiting the foregoing, Motorola agrees that upon the
occurrence of a Trigger Event, if Iridium shall fail to perform its obligations
under Section 8.09 of the Secured Credit Agreement, the Collateral Agent may
require, by written notice, Motorola to provide the Motorola Guarantee in
accordance with Section 1(e) of the Memorandum of Understanding. Motorola
agrees, upon receipt of such notice, promptly to so provide the Motorola
Guarantee. Prior to the Release Date (as defined in said Section 1(e)), the
Iridium shall have no right to require the Commitment Increase (as such term is
defined in 1(b) of the Memorandum of Understanding) for an amount exceeding
$50,000,000), except in accordance with Section 8.09(a) of the Secured Credit
Agreement.
(c) Without limiting any other provision of this Agreement,
Motorola will not amend, waive or otherwise modify, or agree to any amendment,
waiver or modification, or terminate or cancel any provision under the MOU
Agreements to the extent relating to its obligations under paragraph 1(e) of the
Memorandum of Understanding without the prior written consent of the Collateral
Agent.
(d) Motorola confirms that in accordance with Section 15 of the
Memorandum of Understanding, the Collateral Agent and the Lenders are
beneficiaries of the Memorandum of Understanding with respect to Motorola's
obligations (i) to provide the Motorola Guarantee pursuant to Section 1(e)
thereof and (ii) to agree to the deferral of up to $400,000,000 of payments
under the O&M Contract pursuant to Section 3 thereof, and as such the Collateral
Agent and/or the Lenders may enforce such obligations directly against Motorola.
(e) This Section shall terminate upon the earlier of the
Guarantee Obligation Termination Date and the Guarantee Obligation Release Date.
ARTICLE IV
SPECIAL AGREEMENTS RELATING TO
MOTOROLA ASSIGNED AGREEMENTS
Motorola hereby further acknowledges and agrees that, prior to
the transfer of the FCC License to Iridium:
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SECTION 4.01. FCC License.
(a) Without limiting the provisions of Section 3, Motorola
consents to the assignment by Iridium to the Collateral Agent of all of its
rights in and to the Space System Contract pursuant to the Security Agreement,
including, without limitation, the right of Iridium under Section 18.H of the
Space System Contract to require, subject to certain conditions set forth
therein, the transfer of the FCC License to Iridium (or a Subsidiary of Iridium
designated for that purpose) by Motorola. Iridium agrees to request a transfer
of the FCC License pursuant to said Section 18.H at the earliest time as Iridium
reasonably believes that it can satisfy the qualifications of an FCC licensee
under applicable law and FCC regulations and policies. Motorola agrees that (i)
if Iridium fails to so request a transfer (or send a notice to the Collateral
Agent stating that it believes the conditions to such request have not been
satisfied within 30 days after notice from the Collateral Agent to Iridium and
Motorola requesting Iridium to request such a transfer) or (ii) an Event of
Default shall have occurred and be continuing, the Collateral Agent shall be
entitled to enforce the rights of Iridium under said Section 18.H in accordance
with its terms and, in that connection, may request such transfer or may direct
Iridium to request such transfer, subject to the FCC approval to be jointly
applied for by the parties. Motorola agrees to comply as promptly as practicable
with any such request under said Section 18.H, whether made by Iridium or (as
authorized by this paragraph) the Collateral Agent, provided that the conditions
to such transfer set forth in said Section 18.H have been satisfied. Without
limiting the foregoing, in the event that, as a result of the exercise by the
Collateral Agent of the Security Agreement Remedies, Iridium's interest in the
Space System Contract is (or is to be) transferred to another Person, Motorola
agrees to comply with its obligation under such Section 18.H with respect to the
transfer of the FCC License and, if directed by the Collateral Agent or such
Person, to use all reasonable efforts to apply to the FCC for consent to
transfer the FCC License to such Person, subject to satisfaction of all of the
conditions set forth in said Section 18.H (and assuming any such condition
relating to Iridium shall be complied with by such Person). To the extent
Motorola is not obligated under the Space System Contract to pay for the costs
and expenses associated with any such transfer, Iridium will pay such costs and
expenses.
(b) Motorola will not, and will not permit any of its
Subsidiaries to, sell or otherwise dispose (by whatever means) of, or create or
suffer to exist any Lien on, the FCC License or the capital stock or any assets
of SSL, nor shall SSL be party to any merger or consolidation or take any action
to dissolve or liquidate itself, other than (i) a transfer of the FCC License in
accordance with Section 18.H of the Space System Contract and (ii) the creation
of the Lien on such capital stock or the FCC License pursuant to the Motorola
Pledge Agreement or this Agreement. At all times prior to such transfer of the
FCC License to Iridium, the FCC License will be held by SSL, and SSL will not
have any other assets or engage in any business or enter into any transaction
including, without limitation, the incurrence of any liabilities of any kind
whatsoever, other than the holding and ownership of the FCC License and any
activities reasonably incidental thereto.
(c) Motorola agrees that it will not take any action or omit to
take any action that could reasonably be expected to result in the material
Impairment of the FCC License, unless such action or inaction would not violate
its obligations with respect to the FCC License under Article 18 of the Space
System Contract.
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(d) If there shall be a change in law, or the rules or policies
of the FCC that would permit the granting of a security interest in the FCC
License after the date hereof and prior to the transfer of the FCC License to
Iridium pursuant to Section 18.H of the Space System Contract, upon the request
of the Collateral Agent (and at the expense of Iridium), Motorola will cause SSL
to execute and deliver all such instruments and documents, and to take such
other actions, as shall be necessary or appropriate, or as the Collateral Agent
may reasonably request, in order to create a first priority perfected security
interest in the FCC License in favor of the Collateral Agent for the benefit of
the Secured Parties.
SECTION 4.02. Intellectual Property Rights.
(a) Motorola acknowledges that in connection with the Iridium
Business Motorola has granted, and will grant, to Iridium rights in certain
intellectual property owned or held by Motorola and its Subsidiaries on the
terms (but only to the extent) provided in Article 14 of the Space System
Contract and Article 11 of the O&M Contract (collectively, the "Motorola
Intellectual Property"). Without limiting any other provision of this Agreement
(including, without limitation, Section 3), Motorola consents to the assignment
by Iridium to the Collateral Agent of all of Iridium's rights in and to the
Motorola Intellectual Property pursuant to the Security Agreement.
(b) In furtherance of the foregoing, Motorola agrees that (i) for
any period during which the Collateral Agent shall be exercising its Security
Agreement Remedies (including in the event that the Collateral Agent or any of
its designees shall succeed to Iridium's interest in the Space System Contract
and/or the O&M Contract) or (ii) in the event that, as a result of the exercise
by the Collateral Agent of the Security Agreement Remedies, Iridium's rights in
the Space System Contract and/or the O&M Contract are transferred to another
Person, Motorola hereby grants to the Collateral Agent or the relevant
transferee, as the case may be (herein, including any designee, each a
"Licensee") a license to access, use and maintain, and (if deemed by the
relevant Licensee reasonably necessary for the operation of the Space Segment,
to modify and enhance) all Motorola Intellectual Property on the same terms as
are applicable to Iridium (except as otherwise expressly provided herein) or
otherwise on terms reasonably acceptable to Motorola and the relevant Licensee;
provided that (i) no fee, royalty or other amount shall be required to be paid
by any Licensee to Motorola with respect thereto (except as expressly set forth
in the Motorola Assigned Agreements), (ii) any Licensee shall be entitled to use
the Motorola Intellectual Property for so long as such Licensee is operating the
Space Segment, but solely in connection with the operation of the Space Segment
and for no other purpose and (iii) except as set forth herein (including,
without limitation, the last sentence of this paragraph (b)), without the prior
written consent of Motorola, no Licensee shall be permitted to assign, license
or otherwise transfer to any other Person any of its rights in the Motorola
Intellectual Property (and any such assignment, license or transfer in violation
of this clause shall be null and void). Without limiting the foregoing, each
Licensee shall be permitted to sublicense the Motorola Intellectual Property to
any of its respective subcontractors, agents or affiliates, provided that any
such sublicensee shall be subject to the same terms and conditions set forth in
this Section as are applicable to such Licensee.
(c) In the event that at any time other intellectual property
rights (other than the Motorola Intellectual Property) which are then owned or
held by Motorola or any of its
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Subsidiaries are required for the operation of the Space Segment, Motorola shall
promptly notify the Collateral Agent or, following a transfer of Iridium's
rights in the Space System Contract and/or the O&M Contract to any other Person,
such other Person and will license, or cause to be licensed, to the Collateral
Agent or such other Person, as the case may be, such other intellectual property
rights on the same terms and conditions as shall be applicable hereunder to the
Motorola Intellectual Property, and such other intellectual property rights
shall be deemed to be Motorola Intellectual Property for purposes of the
agreements contained in this Section.
(d) Motorola agrees, solely for the benefit of the Collateral
Agent or any other Licensee, not to assert against the Collateral Agent or any
other Licensee any violation of the terms of any intellectual property rights
(including, without limitation, the Motorola Intellectual Property) now or
hereafter owned or held by Motorola (i) by the Collateral Agent in connection
with its exercise of the Security Agreement Remedies or (ii) by any other
Licensee in connection with its operation and maintenance of the Space Segment,
but only for so long as the license or permitted use under this Section is
effective as provided in paragraph (b) above.
(e) Upon the reasonable request of (i) the Collateral Agent in
connection with the exercise of the Security Agreement Remedies or (ii) from and
after the transfer of Iridium's rights in the Space System Contract and/or the
O&M Contract, any other Licensee, Motorola agrees to deliver to the Collateral
Agent or such other Licensee copies of all software documentation required to be
delivered by Motorola under the Motorola Assigned Agreements, subject to the
terms and conditions of the Motorola Assigned Agreements.
(f) Upon exercise of the license granted herein to the Collateral
Agent or any other Licensee, Motorola will provide technical assistance services
and training upon the reasonable request (and at the cost) of the Collateral
Agent in connection with its exercise of the Security Agreement Remedies or any
other Licensee, as the case may be. To the extent any filing, registration or
similar action under applicable Government Rule is required with respect to the
use of the Motorola Intellectual Property by any Licensee, Motorola agrees to
use all reasonable efforts to make all necessary filings or registration, or to
take other similar action, at the cost of Iridium (at any time prior to the
transfer of Iridium's rights in the Space System Contract to any Licensee) or
otherwise at the cost of such Licensee, in order to provide to such Licensee the
full intended benefits of the license granted herein.
(g) Motorola hereby agrees to indemnify and hold harmless the
Collateral Agent and each other Licensee on the same terms and conditions
(including, without limitation, the same limitations, which shall be applicable
to the Collateral Agent and each other Licensee in the aggregate) (mutatis
mutandis) as set forth in Article 15 of the Space System Contract and Article 12
of the O&M Contract (as if each reference therein to "Buyer" or "Owner" referred
to the Collateral Agent or such other Licensee, as the case may be), provided
that notwithstanding anything herein to the contrary, neither the Collateral
Agent nor any other Licensee shall be liable, or assume any liability, for the
obligations of Iridium under the Space System Contract or the O&M Contract
unless and until such entity shall have expressly assumed any such obligations
in connection with the exercise of the Security Agreement Remedies.
Motorola Consent
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ARTICLE V
OTHER AGREEMENTS
Motorola hereby further acknowledges and agrees that, so long as
this Agreement remains in effect:
SECTION 5.01. Minimum Ownership. Motorola will be at all times,
directly or through a wholly-owned Subsidiary, the record and beneficial owner
of at least 13,266,713 Class 1 Interests of Iridium LLC (as such number may be
adjusted from time to time by stock splits, stock dividends, recapitalizations
or other similar transactions), free and clear of any Lien (other than any
transfer or other restrictions relating to such interests, to the extent the
same constitute Liens, arising by operation of law or under the Iridium LLC
Agreement or any shareholder or voting agreement to which Motorola or a
wholly-owned Subsidiary of Motorola is a party in respect of any such interests
held by it).
SECTION 5.02. Non-Compete. Motorola will not produce for itself
or others a commercial satellite-based space system of a global communications
system similar to the Iridium System, which satellite-based space system
provides direct coverage to the entire earth and is designed to principally
provide direct voice service to and from hand-held, fully portable subscriber
units no larger than the first-generation Iridium handheld voice units; provided
that: (a) nothing in this Section shall be construed to prohibit Motorola from
producing satellite-based space systems for Iridium or any successor or related
entity; and (b) notwithstanding anything in this Agreement to the contrary, the
agreement of Motorola under this Section shall terminate and be of no further
force and effect upon the earliest to occur of (i) the date on which this
Agreement shall terminate pursuant to Section 7.13, (ii) the date on which the
Space System Contract shall be terminated in accordance with the terms thereof
(but in no event earlier than December 31, 2000) and (iii) July 31, 2003.
SECTION 5.03. Conditions Precedent. In order to satisfy certain
of the conditions precedent specified in Section 4.01 of the Secured Credit
Agreement, Motorola agrees to deliver the documents specified in Parts III and
VI of Appendix 1 to the Secured Credit Agreement.
SECTION 5.04. Payments. Motorola hereby acknowledges and agrees
that all payments to be made by Motorola to Iridium under the Motorola Assigned
Agreements shall be made in lawful money of the United States of America,
directly to the Collateral Agent, for deposit into the Prepayment Account (as
such term is defined in the Depositary Agreement) (details of which account
shall be provided in writing to Motorola by the Collateral Agent) or to such
other Person and/or at such other address as the Collateral Agent may from time
to time specify in writing to Motorola, for application by the Collateral Agent
in the manner contemplated by the Depositary Agreement, and shall be accompanied
by a notice from Motorola stating that such payments are made under the
applicable Motorola Assigned Agreement and identifying the relevant provision
thereof under which such payment was made. Iridium hereby irrevocably authorizes
and directs Motorola to make such payments in respect of each Motorola Assigned
Agreement as provided above and each of the Collateral Agent (to the extent owed
any payments under such Motorola Assigned Agreement by virtue of this Agreement)
and Iridium
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confirms that any such payment made in the manner herein provided will
constitute a valid discharge of the relevant payment obligations of Motorola
under such Motorola Assigned Agreement, provided that the Collateral Agent shall
have no liability or responsibility hereunder for determining the correctness of
the amount of any payment made or required to be made by Motorola under Motorola
Assigned Agreement. Motorola will not, without the prior written consent of the
Collateral Agent, make any payments to or for the benefit of Iridium under any
of the Motorola Assigned Agreements except in accordance with this Section.
SECTION 5.05. Designees and Transferees. It is acknowledged and
agreed that the Collateral Agent may employ agents and attorneys-in-fact in
exercising the Security Agreement Remedies, and in that connection may designate
another entity to take action on behalf of the Collateral Agent including, but
not limited to, the enforcement of and/or acquisition of Iridium's rights in any
of the Motorola Assigned Agreements or Iridium's assets relating to the Iridium
Business or the equity interests of Iridium. It is further acknowledged and
agreed that in connection with the exercise by the Collateral Agent of the
Securities Agreement Remedies, the Collateral Agent may cause Iridium's rights
in any or all of the Motorola Assigned Agreements (and/or other assets
associated with the Iridium Business) to be transferred or assigned to a third
party pursuant to the Security Agreement (a "transferee"). The provisions of
this Agreement (including, without limitation, in Articles III and IV and this
Article) are intended to benefit the Collateral Agent, its agents,
attorneys-in-fact and designees (collectively, the "designees") and each
transferee. Accordingly, unless the context otherwise requires, references to
"Collateral Agent" or "Administrative Agent" shall be deemed to include
references to designees and transferees thereof permitted pursuant to the
Security Documents (regardless of whether so expressly provided herein), and all
actions permitted to be taken by the Collateral Agent or the Administrative
Agent, as the case may be, under this Agreement may be taken by any such
designee or transferee, as appropriate.
ARTICLE VI
SUBORDINATION
SECTION 6.01. Agreement to Subordinate.
(a) Motorola covenants and agrees, and Iridium likewise covenants
and agrees, that, to the extent and in the manner hereinafter set forth in this
Section (but subject to Section 6.01(b)), the payment of the Motorola
Subordinated Claims is hereby expressly made subordinate and subject in right of
payment to the prior indefeasible payment in full in cash of all Senior Bank
Debt. In further of the foregoing, (except as expressly permitted under
paragraph (b) below) Motorola and Iridium agree that no payment shall be made by
Iridium, nor accepted by Motorola, on account of the Motorola Subordinated
Claims unless and until all Senior Bank Debt shall have been paid in full in
cash and all commitments of the holders of Senior Bank Debt to make loans under
the Senior Credit Agreement shall have expired or terminated. In the event that,
notwithstanding the foregoing (but subject to Section 6.02 in the circumstances
described therein), Motorola shall have received any payment prohibited by this
Section (including, in the case of any payment covered by paragraph (b) below,
the receipt by Motorola of such payment at a time when a Default shall have
occurred and be continuing), then and in such event such payment shall be held
in trust by Motorola for the holders of the Senior Bank Debt and paid over
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or delivered forthwith to the Senior Bank Debt Representative for application to
the Senior Bank Debt remaining unpaid after giving effect to any concurrent
payment of or distribution to or for the holders of Senior Bank Debt.
(b) Notwithstanding anything herein to the contrary, so long as
(i) no default in payment in respect of the Senior Bank Debt exists and (ii) no
Event of Default shall have occurred and be continuing, Iridium may pay to
Motorola (and Motorola shall be entitled to receive and retain) (x) cash
interest when due on the Deferred O&M Amounts (and any promissory notes of
Iridium evidencing the same) in accordance with Section 3 of the Memorandum of
Understanding, (y) cash compensation pursuant to Section 3(e) or 3(f) of the
Agreement Regarding Guarantee and (z) any amounts in respect of the Refinancing
or payment of any of the Motorola Subordinated Claims to the extent not
prohibited by Section 7.14 of the Secured Credit Agreement. Nothing herein shall
prevent the payment by Iridium LLC to Motorola of the warrant compensation
provided in the Agreement Regarding Guarantee.
SECTION 6.02. Bankruptcy, Liquidation, Dissolution, Etc. In the
event of (a) any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or proceeding in
connection therewith, relative to Iridium or to its creditors, as such, or to
its assets, or (b) any liquidation, dissolution or other winding up of Iridium,
whether voluntary or involuntary and whether or not involving insolvency or
bankruptcy, or (c) any assignment for the benefit of creditors or any other
marshalling of assets and liabilities of Iridium, then and in any such event:
(i) the holders of Senior Bank Debt shall be entitled to receive
payment in full in cash of all amounts due or to become due on or in
respect of all Senior Bank Debt, before Motorola is entitled to receive
any payment on account of the Motorola Subordinated Claims; and
(ii) any payment or distribution of assets of Iridium of any
kind or character, whether in cash, property or securities, by set-off
or otherwise, to which Motorola would be entitled but for the provisions
of this Agreement, including any such payment or distribution which may
be payable or deliverable by reason of the payment of any other
Indebtedness of Iridium being subordinated to the payment of the
Motorola Subordinated Claims, shall be paid by the liquidating trustee
or agent or other person making such payment or distribution, whether a
trustee in bankruptcy, a receiver or liquidating trustee or otherwise,
directly to the holders of Senior Bank Debt or the Senior Bank Debt
Representative or to the trustee or trustees under any indenture under
which any instruments evidencing any of such Senior Bank Debt may have
been issued, ratably according to the aggregate amounts remaining unpaid
on account of the Senior Bank Debt held or represented by each such
holder, to the extent necessary to make payment in full in cash of all
Senior Bank Debt remaining unpaid, after giving effect to any concurrent
payment or distribution to or for the holders of such Senior Bank Debt;
and
(iii) in the event that, notwithstanding the foregoing
provisions of this Section, Motorola shall have received any such
payment or distribution of assets of Iridium of any kind or character,
whether in cash, property or securities, including any such payment or
distribution which may be payable or deliverable by reason of the
payment of any other
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Indebtedness of Iridium being subordinated to the payment of the
Motorola Subordinated Claims before all Senior Bank Debt is paid in full
in cash, then and in such event such payment or distribution shall be
held in trust for the holders of Senior Bank Debt and paid over or
delivered forthwith to the trustee in bankruptcy, receiver, liquidating
trustee, custodian, assignee, agent or other Person making payment or
distribution of assets of Iridium for application to the payment of all
Senior Bank Debt remaining unpaid, to the extent necessary to pay all
Senior Bank Debt in full in cash, after giving effect to any concurrent
payment or distribution to or for the holders of Senior Bank Debt.
If Motorola shall have failed to file proper claims or proofs of
claim with respect to the Motorola Subordinated Claims in any proceeding of the
type referred to in the first sentence of this Section prior to 30 days before
the expiration of the time to file such claims or proofs of claim, Motorola
hereby appoints and empowers the Senior Bank Debt Representative (i) to file
such claims or proofs of claim and/or (ii) if Motorola shall fail to vote any
such claim at least 15 days prior to the expiration of the time to vote such
claim, to vote such claim; provided that the Senior Bank Debt Representative
shall have no obligation to file and/or vote any such claim. If the Senior Bank
Debt Representative votes any such claim in accordance with the provisions of
this paragraph Motorola shall not be entitled to modify, revoke or withdraw such
vote. Motorola shall execute and deliver, at the expense of the holders of the
Senior Bank Debt, such agreements, instruments and documents as the holders of
the Senior Bank Debt or the Senior Bank Debt Representative may reasonably
request to carry out the intent of this paragraph.
SECTION 6.03. Subrogation. Subject to the payment in full in cash
of all Senior Bank Debt and the expiration or termination of the commitments of
the holders of Senior Bank Debt to make extensions of credit under the Senior
Credit Agreement, Motorola shall be subrogated to the rights of the holders of
Senior Bank Debt to receive payments and distributions of cash, property and
securities applicable to the Senior Bank Debt until the Motorola Subordinated
Claims shall be paid in full. For purposes of such subrogation, no payments or
distributions to the holders of Senior Bank Debt of any cash, property or
securities to which Motorola would be entitled except for the provisions of this
Section, and no payments over pursuant to the provisions of this Section to the
holders of Senior Bank Debt by Motorola shall, as among Iridium, its creditors
(other than holders of Senior Bank Debt) and Motorola, be deemed to be a payment
or distribution by Iridium to or on account of the Senior Bank Debt.
SECTION 6.04. Provisions Solely to Define Relative Rights. The
provisions of this Section are and are intended solely for the purpose of
defining the relative rights of Motorola as the holder of the Motorola
Subordinated Claims, on the one hand, and the holders of Senior Bank Debt, on
the other hand. Nothing contained in this Section or elsewhere in this Agreement
is intended to or shall (a) impair, as among Iridium, its creditors (other than
holders of Senior Bank Debt) and Motorola, the obligation of Iridium, which is
absolute and unconditional, to pay to Motorola the Motorola Subordinated Claims
as and when the same shall become due and payable in accordance with their
respective terms, or (b) affect the relative rights against Iridium of Motorola
and creditors of Iridium (other than the holders of Senior Bank Debt).
SECTION 6.05. No Waiver of Subordination Provisions. No right of
any present or future holder of any Senior Bank Debt to enforce subordination as
herein provided shall at any
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time in any way be prejudiced or impaired by any act or failure to act on the
part of Iridium or by any act or failure to act, in good faith, by any such
holder, or by any non-compliance by Iridium with the terms, provisions and
covenants of this Agreement, regardless of any knowledge thereof any such holder
may have or be otherwise charged with. Without in any way limiting the
generality of the foregoing sentence, the holders of Senior Bank Debt may
(except as provided in Section 6.08), at any time and from time to time, without
the consent of or notice to Motorola, without incurring responsibility to
Motorola and without impairing or releasing the subordination provided in this
Section or the obligations hereunder of Motorola to the holders of Senior Bank
Debt, do any one or more of the following:
(i) change the manner, place or terms of payment or extend the
time of payment of, or renew or alter, Senior Bank Debt or any
instrument evidencing the same or any agreement under which Senior Bank
Debt is outstanding;
(ii) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Bank Debt, or waive any
provision thereof or the occurrence of any default thereunder;
(iii) release any Person liable in any manner for the collection
of Senior Bank Debt; and
(iv) exercise or refrain from exercising any rights against
Iridium and any other Person.
SECTION 6.06. Limitations on Remedies. Notwithstanding anything
contained herein to the contrary, prior to the payment of all Senior Bank Debt
in full in cash and the expiration or termination of the commitments of the
holders of Senior Bank Debt to make extensions of credit under the Senior Credit
Agreement, Motorola will not ask, demand, claim or sue for payment of, or take
any other action to collect, any of the Motorola Subordinated Claims, whether by
set-off or in any other manner, and, without limiting the foregoing, Motorola
will not (i) initiate any judicial proceeding or action to collect all or any
portion of the Motorola Subordinated Claims or (ii) file or join with others in
filing a petition against Iridium or any of its Subsidiaries under any
bankruptcy or similar law; provided that, notwithstanding the foregoing,
Motorola shall be permitted to commence judicial proceedings against Iridium to
the extent (but only to the extent) necessary to avoid being barred by any
relevant statute of limitations from pursuing any such right or remedy against
Iridium and thereafter shall take only such action in connection with such
proceeding as shall be reasonably necessary to preserve such right or remedy.
Motorola agrees to notify the Administrative Agent of the commencement of any
such proceeding and of any material development in connection therewith.
SECTION 6.07. Covenants Relating to Motorola Subordinated Claims.
Motorola covenants and agrees with the Lenders and the Administrative Agent
that, until the payment and satisfaction in full of the Senior Bank Debt and the
expiration or termination of the Commitments of the Lenders under the Senior
Credit Agreement:
(a) the Motorola Subordinated Claims shall be unsecured
obligations of Iridium (and not of any of Iridium's Subsidiaries), and
Motorola will not ask, demand, take or
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receive any property of Iridium or any of its Subsidiaries as security
for all or any portion of the Motorola Subordinated Claims (except as
may arise by operation of law);
(b) Motorola agrees that it does not, and will not, have or
acquire any claim against any Subsidiary of Iridium with respect to any
of the Motorola Subordinated Claims;
(c) Motorola will not, without the prior written consent of the
Administrative Agent, assign or otherwise transfer, in whole or in part,
or encumber any of its rights or obligations in respect of the Motorola
Subordinated Claims (other than in connection with any transaction
permitted under the last sentence of Section 3.03);
(d) Motorola will not, without the prior written consent of the
Administrative Agent, amend or otherwise modify the provisions of the
Motorola Subordinated Claims or any Motorola Guarantee Agreement in any
way which could reasonably be expected to be adverse to the interests of
the holders of Senior Bank Debt under this Agreement;
(e) Motorola will promptly following the request of the
Administrative Agent execute and deliver such further documents and do
such other acts and things as the Administrative Agent or any Lender may
reasonably request from time to time in order to more fully effect the
purposes of this Section.
SECTION 6.08. Modification of the Senior Credit Agreement.
Notwithstanding anything herein or in the Senior Credit Agreement to the
contrary, no amendment or modification to the Senior Credit Agreement or any
refinancing thereof shall be effective as against Motorola for purposes of the
subordination provisions set forth in this Article (and the related definitions)
without the prior written consent thereto by Motorola, if such amendment,
modification or refinancing, as the case may be, (a) increases the aggregate
commitments under the Senior Credit Agreement such that the aggregate principal
amount of loans under the Senior Bank Debt would exceed $1,700,000,000, (b)
alters in any material respect the types of obligations that constitute Senior
Bank Debt, (c) extends the maturity of the Loans under the Senior Credit
Agreement beyond July 15, 2005 or (d) modifies any of the subordination
provisions set forth in this Article.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. No Waiver. No failure on the part of any Agent or
any Lender to exercise, and no course of dealing with respect to, and no delay
in exercising, any right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise by any Agent or any Lender of
any right, power or remedy hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. The remedies herein
are cumulative and are not exclusive of any remedies provided by law.
SECTION 7.02. Notices. All notices, requests, consents and
demands hereunder shall be in writing and telecopied or delivered to the
intended recipient at the "Address for Notices" specified beneath its name on
the signature pages hereof or, as to either party, at such
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other address as shall be designated by such party in a notice to the other
party. Except as otherwise provided in this Agreement, all such communications
shall be deemed to have been duly given when transmitted by telecopier or
personally delivered or, in the case of a mailed notice, upon receipt, in each
case given or addressed as aforesaid.
SECTION 7.03. Expenses. Motorola agrees to reimburse each of the
Lenders and the Agents for all reasonable out-of-pocket costs and expenses of
the Lenders and the Agents (including, without limitation, the reasonable fees
and expenses of legal counsel) in connection with (a) any default by Motorola in
the performance of any of its obligations hereunder and any enforcement or
collection proceeding resulting therefrom, including, without limitation, all
manner of participation in or other involvement with (i) bankruptcy, insolvency,
receivership, foreclosure, winding up or liquidation proceedings, (ii) judicial
or regulatory proceedings and (iii) workout, restructuring or other negotiations
or proceedings (whether or not the workout, restructuring or transaction
contemplated thereby is consummated) and (b) the enforcement of this Section.
SECTION 7.04. Amendments. The terms of this Agreement may be
amended or modified only by an instrument in writing duly executed by Motorola,
Iridium and the Administrative Agent and the Collateral Agent, and any provision
of this Agreement may be waived by the Administrative Agent acting with the
consent of such Lenders. Any such amendment or waiver shall be binding upon
Motorola, Iridium, each Agent, each Lender and (in the case of any amendment or
waiver relating to Article VI or any related definitions or terms) any other
holder of Senior Bank Debt. Any waiver shall be effective only for the specified
purpose for which it was given.
SECTION 7.05. Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the respective successors and assigns
of Motorola, Iridium, the Agents and the Lenders, provided, however, that
Motorola shall not assign or transfer any of its rights or obligations hereunder
without the prior written consent of the Administrative Agent. The agreements of
the parties hereto are solely for the benefit of Motorola, the Agents and the
other Secured Parties, and no person or entity (other than the foregoing parties
and their respective permitted successors and assigns) shall have any rights
hereunder.
SECTION 7.06. Captions. The captions and section headings
appearing herein are included solely for convenience of reference and are not
intended to affect the interpretation of any provision of this Agreement.
SECTION 7.07. Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument and either of the parties hereto may execute this Agreement by
signing any such counterpart.
SECTION 7.08. Governing Law; Submission to Jurisdiction. This
Agreement shall be governed by, and construed in accordance with, the law of the
State of New York. Motorola hereby submits to the nonexclusive jurisdiction of
the United States District Court for the Southern District of New York and of
the Supreme Court of the State of New York sitting in New York County (including
its Appellate Division), and of any other appellate court in the State of New
York, for the purposes of all legal proceedings arising out of or relating to
this
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Agreement or the transactions contemplated hereby. Motorola hereby irrevocably
waives, to the fullest extent permitted by applicable law, any objection that it
may now or hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum. Motorola irrevocably consents
to the service of any and all process in any such suit, action or proceeding by
mailing of copies of such process to it at its address provided under Section
7.02. All mailings under this Section shall be by certified mail, return receipt
requested. Nothing in this Agreement will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.
SECTION 7.09. Waiver of Jury Trial. EACH OF MOTOROLA, IRIDIUM,
THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT (IN EACH CASE, ON BEHALF OF
ITSELF AND THE LENDERS) HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
SECTION 7.10. Agents and Attorneys-in-Fact. Each Agent may employ
agents and attorneys-in-fact in connection herewith and shall not be responsible
for the negligence or misconduct of any such agents or attorneys-in-fact
selected by it in good faith.
SECTION 7.11. Severability. If any provision hereof is invalid
and unenforceable in any jurisdiction, then, to the fullest extent permitted by
law, (a) the other provisions hereof shall remain in full force and effect in
such jurisdiction and shall be liberally construed in favor of the Agents and
the Lenders in order to carry out the intentions of the parties hereto as nearly
as may be possible and (b) the invalidity or unenforceability of any provision
hereof in any jurisdiction shall not affect the validity or enforceability of
such provision in any other jurisdiction.
SECTION 7.12. Confidentiality.
(a) Motorola acknowledges that from time to time financial
advisory, investment banking and other services may be offered or provided to
Motorola or one or more of its Subsidiaries (in connection with this Agreement
or otherwise) by any Lender or by one or more subsidiaries or affiliates of such
Lender. Motorola hereby agrees that, in the event any such services are provided
to Motorola or any of its Subsidiaries, each Lender providing such services is
authorized to share any information delivered to such Lender by Motorola and its
Subsidiaries pursuant to the Credit Documents, or in connection with the
decision of such Lender to enter into the Secured Credit Agreement, to any such
subsidiary or affiliate providing such services, provided that any such
subsidiary or affiliate receiving such information agrees to be bound by the
provisions of paragraph (b) of this Section as if it were a Lender hereunder.
Such authorization shall survive the repayment of the Loans and the termination
of the Commitments.
(b) Each Agent agrees on behalf of itself, each Lender and each
Global Lead Arranger (and on behalf of their respective affiliates, directors,
officers, employees and representatives) to restrict dissemination of any
Confidential Information (as defined below) only to those of its directors,
officers, employees and representatives who are involved in the
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evaluation of such information, and to use reasonable precautions to keep such
information confidential, in accordance with its customary procedures for
handling confidential information of the same nature and in accordance with safe
and sound banking practices. For purposes of the Credit Documents, "Confidential
Information" shall mean any non-public information supplied to it by Motorola
pursuant to this Agreement or any other Motorola Agreement, that is identified
(in writing, in the case of written information) by Motorola as being
confidential at the time the same is delivered to the Lenders, the Agents or the
Global Lead Arrangers, provided that nothing herein shall limit the disclosure
of any such information by any Lender, any Agent or any Global Lead Arranger (i)
after such information shall have become public (other than through a violation
of this Section by such Lender, any Agent or any Global Lead Arranger), (ii) to
the extent required by statute, rule, regulation or judicial process, (iii) to
counsel or other experts for any of the Lenders, Agents or Global Lead
Arrangers, provided that such counsel or experts shall be bound by the
requirements of this paragraph (b) with respect to any such information, (iv) to
bank examiners (or any other regulatory authority having jurisdiction over any
Lender, any Agent or any Global Lead Arranger), or to auditors or accountants,
(v) to any Global Lead Arranger, any Agent or any Lender (or to any of their
respective affiliates, provided that any such disclosure to any such affiliate
shall be made on a "need to know" basis only for use by such affiliates (and
each of its officers, directors and employees) solely in connection with the
transactions contemplated by the Credit Documents and each such affiliate (and
each of its officers, directors and employees) shall agree (for the benefit of
Iridium and Motorola) to be bound to keep such information confidential on the
same terms as set forth in this Section), (vi) in connection with any litigation
to which any one or more of the Lenders, the Global Lead Arrangers or the Agents
is a party, or in connection with the enforcement of rights or remedies
hereunder or under any other Credit Document, provided that the party intending
to make such disclosure shall use reasonable efforts to cooperate with Motorola
to reasonably minimize the extent of any such disclosure or to obtain
confidential treatment of information to be disclosed, (vii) to a subsidiary or
affiliate of such Lender as provided in paragraph (a) of this Section or (viii)
to any assignee or participant (or prospective assignee or participant) so long
as such assignee or participant (or prospective assignee or participant) first
executes and delivers to the respective Lender and Motorola a confidentiality
agreement containing provisions substantially the same as those in this Section;
provided, further, that in no event shall any Lender, any Agent or any Global
Lead Arranger be obligated or required to return any materials furnished by
Motorola hereunder or under any other Motorola Agreement, except to the extent
it has agreed to do so in writing in conjunction with the receipt of such
information. The obligations of any assignee that has executed a confidentiality
agreement as provided above shall be superseded by this Section on the date upon
which such assignee becomes a Lender hereunder pursuant to Section 11.04(b) of
the Secured Credit Agreement.
SECTION 7.13. Effective Date; Termination. This Agreement shall
become effective upon the execution and delivery of one or more counterparts
hereof by each of the parties hereto and (except as otherwise provided in clause
(b) of Section 5.02) shall continue in effect until payment in full of all
principal of and interest on the Loans and all other amounts owing to the
Lenders and the Agents under the Secured Credit Agreement and the other Credit
Documents and the expiration or termination of the Commitments, whereupon this
Agreement shall terminate. If, at any time, all or part of any payment with
respect to the Loans (or, in the case of Article VI, the Senior Bank Debt)
theretofore made by Iridium or any other Person is rescinded or must otherwise
be returned by the holders thereof for any reason whatsoever
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(including, without limitation, the bankruptcy, insolvency, reorganization or
similar action involving Iridium or such other Person), this Agreement (except
as otherwise provided in clause (b) of Section 5.02) shall continue to be
effective or be reinstated, as the case may be, all as though such payment had
not been made. This Agreement shall supersede and replace in all respects the
Consent and Agreement dated as of January 27, 1998 entered into by Motorola in
connection with the Existing Secured Credit Agreement, and such Consent and
Agreement shall terminate automatically upon this Agreement coming into force.
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IN WITNESS WHEREOF, the parties hereto have caused this Consent
and Agreement to be duly executed and delivered as of the day and year first
above written.
MOTOROLA, INC.
By
--------------------------
Name:
Title:
Address for Notices:
Motorola, Inc.
Corporate Offices
1303 East Algonquin Road
Schaumburg, Illinois 60196
Attention: Senior Vice President, Finance
Telecopier No.: 847-538-9969
Telephone No.: 847-538-5866
with copies to:
Motorola, Inc.
Corporate Offices
1303 East Algonquin Road
Schaumburg, Illinois 60196
Attention: Corporate Secretary
Telecopier No.: 847-576-2818
Telephone No.: 847-576-5008
and
Motorola, Inc.
2501 S. Prize Road
Chandler, Arizona 85258
Attention: Vice President -
Law Department, Iridium Matters
Telecopier No.: 602-732-3188
Telephone No.: 602-732-3187
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IRIDIUM
IRIDIUM OPERATING LLC
By
--------------------------
Name:
Title:
Motorola Consent
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AGENTS
THE CHASE MANHATTAN BANK,
as Administrative Agent
By
--------------------------
Name:
Title:
THE CHASE MANHATTAN BANK,
as Collateral Agent
By
--------------------------
Name:
Title:
Motorola Consent
<PAGE> 281
SCHEDULE 1
Matters Affecting Certain Motorola Assigned Agreements
[to be completed by Motorola]
Schedule 1 to Motorola Consent
<PAGE> 282
SCHEDULE 2
Governmental Approvals and Proceedings
[to be completed by Motorola]
Schedule 2 to Motorola Consent
<PAGE> 283
EXHIBIT H
[FORM OF MOTOROLA PLEDGE AGREEMENT]
PLEDGE AGREEMENT
PLEDGE AGREEMENT dated as of December __, 1998 between: MOTOROLA,
INC., a corporation duly organized and validly existing under the laws of the
State of Delaware (the "Pledgor"); and THE CHASE MANHATTAN BANK, as collateral
agent for the lenders party to the Credit Agreement referred to below (in such
capacity, together with its successors in such capacity, the "Collateral
Agent").
Iridium Operating LLC, a Delaware limited liability company (the
"Company"), certain lenders, the Collateral Agent, The Chase Manhattan Bank, as
Administrative Agent, and Barclays Bank PLC, as Documentation Agent thereunder
are parties to a Senior Secured Credit Agreement dated as of December 23, 1998
(as modified, supplemented or otherwise modified and in effect from time to
time, the "Credit Agreement"), providing, subject to the terms and conditions
thereof, for loans to be made by said lenders to the Company in an aggregate
principal amount not exceeding $800,000,000.
To induce said lenders to enter into the Credit Agreement and to
extend credit thereunder, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Pledgor has agreed
to pledge and grant a security interest in the Collateral (as hereinafter
defined) as security for the Secured Obligations (as so defined). Accordingly,
the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms. Capitalized terms used but not
defined herein shall have their respective defined meanings in the Credit
Agreement. In addition, as used herein:
"Collateral" has the meaning assigned to such term in Article
III.
"Secured Obligations" shall mean, collectively, (a) all
obligations of the Company in respect of principal of and interest on the
Loans and all other amounts owing under the Credit Agreement and the
other Credit Documents to which it is a party, (b) all obligations of
each Subsidiary of the Company under Credit Document to which it is a
party and (c) all obligations of the Pledgor to the Collateral Agent
hereunder.
"Secured Parties" means the Lenders, the Collateral Agent and the
other Agents.
"Uniform Commercial Code" shall mean the Uniform Commercial Code
as in effect from time to time in the State of New York.
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SECTION 1.02. Terms Generally. The definitions of terms herein
shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
The word "will" shall be construed to have the same meaning and effect as the
word "shall". Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified, including an amendment
and restatement thereof, but subject to any restrictions on such amendments,
supplements or modifications set forth herein, (b) any reference herein to any
Person shall be construed to include such Person's successors and assigns or, in
the case of any Governmental Authority, any entity succeeding to any or all of
the functions of such Governmental Authority, (c) the words "herein", "hereof"
and "hereunder", and words of similar import, shall be construed to refer to
this Agreement in its entirety and not to any particular provision hereof, (d)
all references herein to Articles, Sections and Annexes shall be construed to
refer to Articles and Sections of, and Annexes to, this Agreement and (e) the
words "asset" and "property" shall be construed to have the same meaning and
effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
The Pledgor represents and warrants to the Secured Parties that:
(a) The Pledgor has all right, title and interest in, to and
under, and is the record owner of, the Collateral in which it purports to grant
a security interest pursuant to Section 3 and no Lien exists or will exist upon
the Collateral at any time (and no right or option to acquire the same exists in
favor of any other Person), except for the pledge and security interest in favor
of the Collateral Agent for the benefit of the Lenders created or provided for
herein, which pledge and security interest constitute a first priority perfected
pledge and security interest in and to all of the Collateral.
(b) The Pledged Stock represented by the certificates identified
in Annex 1 is, and all other Pledged Stock in which the Pledgor shall hereafter
grant a security interest pursuant to Article III will be, duly authorized,
validly existing, fully paid and non-assessable and none of such Pledged Stock
is or will be subject to any contractual restriction, or any restriction under
the charter or by-laws of the issuer of the Pledged Stock, upon the transfer of
such Pledged Stock (except for any such restriction contained herein).
(c) The Pledged Stock represented by the certificates identified
in Annex 1 constitutes all of the issued and outstanding shares of capital stock
of any class of the issuer of the Pledged Stock beneficially owned by the
Pledgor on the date hereof (whether or not registered in the name of the
Pledgor) and Annex 1 correctly identifies, as at the date hereof, the respective
class and par value of the shares comprising such Pledged Stock and the
respective number of shares (and registered owners thereof) represented by each
such certificate.
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ARTICLE III
PLEDGE
As collateral security for the prompt payment in full when due
(whether at stated maturity, by acceleration or otherwise) of the Secured
Obligations now existing or hereafter arising, the Pledgor hereby pledges,
assigns, hypothecates and transfers to the Collateral Agent for the equal and
ratable benefit of the Secured Parties, and hereby grants to the Collateral
Agent for the equal and ratable benefit of the Secured Parties a Lien on and
security interest in, all of the Pledgor's right, title and interest in, to and
under the following, whether now owned by the Pledgor or hereafter acquired and
whether now existing or hereafter coming into existence and wherever located
(all being collectively referred to herein as "Collateral"):
(a) the shares of common stock of Space System License, Inc.
represented by the certificate(s) identified in Annex 1 and all other shares of
capital stock of whatever class of such issuer, now or hereafter owned by the
Pledgor, in each case together with the certificates evidencing the same or, if
the Pledgor shall at any time transfer the FCC License to another Subsidiary,
the shares of common stock of such Subsidiary and all other shares of capital
stock of whatever class of such Subsidiary (collectively, the "Pledged Stock");
(b) all shares, securities, moneys or property representing a
dividend on any of the Pledged Stock, or representing a distribution or return
of capital upon or in respect of the Pledged Stock, or resulting from a
split-up, revision, reclassification or other like change of the Pledged Stock
or otherwise received in exchange therefor, and any subscription warrants,
rights or options issued to the holders of, or otherwise in respect of, the
Pledged Stock;
(c) without affecting the obligations of the Pledgor under any
provision prohibiting such action hereunder or under any other Motorola
Agreement, in the event of any consolidation or merger in which the issuer of
the Pledged Stock is not the surviving corporation, all shares of each class of
the capital stock of the successor corporation (unless such successor
corporation is the Pledgor itself) formed by or resulting from such
consolidation or merger; and
(d) all proceeds, products, offspring, rents, revenues, issues,
profits, royalties, income, benefits, accessions, additions, substitutions and
replacements of and to any of the property of the Pledgor described in the
preceding clauses of this Section and, to the extent related to any property
described in said clauses or such proceeds, all books, correspondence, credit
files, records, invoices and other papers.
ARTICLE IV
REMEDIES
In furtherance of the grant of the pledge and security interest
pursuant to Article III, the Pledgor hereby agrees with the Secured Parties as
follows:
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SECTION 4.01. Delivery and Other Perfection. The Pledgor shall:
(a) if any of the shares, securities, moneys or property required
to be pledged by the Pledgor under Article III are received by the Pledgor,
forthwith either (x) transfer and deliver to the Collateral Agent such shares or
securities so received by the Pledgor (together with the certificates for any
such shares and securities duly endorsed in blank or accompanied by undated
stock powers duly executed in blank), all of which thereafter shall be held by
the Collateral Agent, pursuant to the terms of this Agreement, as part of the
Collateral or (y) take such other action as the Agent shall deem necessary or
appropriate to duly perfect the Lien created hereunder in such shares,
securities, moneys or property in Article III;
(b) give, execute, deliver, file and/or record any financing
statement, notice, instrument, document, agreement or other papers that may be
necessary or desirable (in the judgment of the Collateral Agent) to create,
preserve, perfect or validate the security interest granted pursuant hereto or
to enable the Collateral Agent to exercise and enforce its rights hereunder with
respect to such pledge and security interest, including, without limitation,
causing any or all of the Collateral to be transferred of record into the name
of the Collateral Agent or its nominee (and the Collateral Agent agrees that if
any Collateral is transferred into its name or the name of its nominee, the
Collateral Agent will thereafter promptly give to the Pledgor copies of any
notices and communications received by it with respect to the Collateral pledged
by the Pledgor hereunder);
(c) keep full and accurate books and records relating to the
Collateral, and stamp or otherwise mark such books and records in such manner as
the Collateral Agent may reasonably require in order to reflect the security
interests granted by this Agreement; and
(d) permit representatives of the Collateral Agent, upon
reasonable notice, at any time during normal business hours to inspect and make
abstracts from its books and records pertaining to the Collateral, all in such
manner as the Collateral Agent may require.
SECTION 4.02. Other Financing Statements and Liens. Without the
prior written consent of the Collateral Agent, the Pledgor shall not file or
suffer to be on file, or authorize or permit to be filed or to be on file, in
any jurisdiction, any financing statement or like instrument with respect to the
Collateral in which the Collateral Agent is not named as the sole secured party
for the benefit of the Secured Parties.
SECTION 4.03. Preservation of Rights. The Collateral Agent shall
not be required to take steps necessary to preserve any rights against prior
parties to any of the Collateral.
SECTION 4.04. Pledged Stock.
(a) The Pledgor will cause the Collateral to constitute at all
times 100% of the total number of shares of each class of capital stock then
outstanding of the Subsidiary of the Pledgor holding the FCC License.
(b) Except as expressly permitted under the Motorola Consent, the
Pledgor (i) will not create, incur, assume or suffer to exist any Lien upon, or
sell, assign, transfer or
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otherwise dispose of all or any part of, the Collateral or (ii) consent to the
creation of any restriction applicable to the Collateral Agent on the sale,
assignment, transfer or other disposition by the Collateral Agent of any of the
Collateral (except as provided in this Agreement).
SECTION 4.05. Events of Default, Etc. During the period during
which an Event of Default shall have occurred and be continuing:
(a) the Collateral Agent shall have all of the rights and
remedies with respect to the Collateral of a secured party under the Uniform
Commercial Code (whether or not said Code is in effect in the jurisdiction where
the rights and remedies are asserted) and such additional rights and remedies to
which a secured party is entitled under the laws in effect in any jurisdiction
where any rights and remedies hereunder may be asserted, including, without
limitation, the right, to the maximum extent permitted by law, to exercise all
voting, consensual and other powers of ownership pertaining to the Collateral as
if the Collateral Agent were the sole and absolute owner thereof (and the
Pledgor agrees to take all such action as may be appropriate to give effect to
such right);
(b) the Collateral Agent in its discretion may, in its name or in
the name of the Pledgor or otherwise, demand, sue for, collect or receive any
money or property at any time payable or receivable on account of or in exchange
for any of the Collateral, but shall be under no obligation to do so; and
(c) the Collateral Agent may, upon 30 days' prior written notice
to the Pledgor of the time and place, with respect to the Collateral or any part
thereof that shall then be or shall thereafter come into the possession, custody
or control of the Secured Parties or any of their respective agents, sell,
lease, assign or otherwise dispose of all or any part of the Collateral, at such
place or places as the Collateral Agent deems best, and for cash or for credit
or for future delivery, at public or private sale, without demand of performance
or notice of intention to effect any such disposition or of the time or place
thereof (except such notice as is required above or by applicable statute and
cannot be waived), and any Secured Party or anyone else may be the purchaser,
lessee, assignee or recipient of any or all of the Collateral so disposed of at
any public sale (or, to the extent permitted by law, at any private sale) and
thereafter hold the same absolutely, free from any claim or right of whatsoever
kind, including any right or equity of redemption (statutory or otherwise), of
the Pledgor, any such demand, notice and right or equity being hereby expressly
waived and released. The Collateral Agent may, without notice or publication,
adjourn any public or private sale or cause the same to be adjourned from time
to time by announcement at the time and place fixed for the sale, and such sale
may be made at any time or place to which the sale may be so adjourned.
The proceeds of each collection, sale or other disposition under
this Section shall be applied in accordance with Section 4.08.
The Pledgor recognize that, by reason of certain prohibitions
contained in the Securities Act of 1933, as amended, and applicable state
securities laws, the Collateral Agent may be compelled, with respect to any sale
of all or any part of the Collateral, to limit purchasers to those who will
agree, among other things, to acquire the Collateral for their own account, for
investment and not with a view to the distribution or resale thereof. The
Pledgor acknowledge
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that any such private sales may be at prices and on terms less favorable to the
Collateral Agent than those obtainable through a public sale without such
restrictions, and, notwithstanding such circumstances, agree that any such
private sale shall be deemed to have been made in a commercially reasonable
manner and that the Collateral Agent shall have no obligation to engage in
public sales and no obligation to delay the sale of any Collateral for the
period of time necessary to permit the Company or issuer thereof to register it
for public sale.
SECTION 4.06. Removals, Etc. Without at least 30 days' prior
written notice to the Collateral Agent, the Pledgor shall not (i) maintain any
of its books and records with respect to the Collateral at any office or
maintain its principal place of business at any place other than at the address
indicated beneath its signature hereto or (ii) change its corporate name, or the
name under which it does business, from the name shown on the signature pages
hereto.
SECTION 4.07. Private Sale. No Secured Party shall incur any
liability as a result of the sale of the Collateral, or any part thereof, at any
private sale pursuant to Section 4.05 conducted in a commercially reasonable
manner. The Pledgor hereby waives any claims against the Secured Parties arising
by reason of the fact that the price at which the Collateral may have been sold
at such a private sale was less than the price that might have been obtained at
a public sale or was less than the aggregate amount of the Secured Obligations,
even if the Collateral Agent accepts the first offer received and does not offer
the Collateral to more than one offeree.
SECTION 4.08. Application of Proceeds. Except as otherwise herein
expressly provided, the proceeds of any collection, sale or other realization of
all or any part of the Collateral pursuant hereto, and any other cash at the
time held by the Collateral Agent under this Agreement, shall be applied by the
Collateral Agent:
First, to the payment of the costs and expenses of such
collection, sale or other realization, including reasonable
out-of-pocket costs and expenses of the Collateral Agent and the
reasonable fees and expenses of its agents and counsel, and all
reasonable expenses incurred and advances made by the Collateral Agent
in connection therewith;
Next, to the payment in full of the Secured Obligations, in each
case equally and ratably in accordance with the respective amounts
thereof then due and owing or as the Lenders holding the same may
otherwise agree; and
Finally, to the payment to the Pledgor, or its successors or
assigns, or as a court of competent jurisdiction may direct, of any
surplus then remaining.
As used in this Article IV, "proceeds" of Collateral shall mean
cash, securities and other property realized in respect of, and distributions in
kind of, Collateral, including any thereof received under any reorganization,
liquidation or adjustment of debt of the Pledgor or any issuer of or obligor on
any of the Collateral.
SECTION 4.09. Attorney-in-Fact. Without limiting any rights or
powers granted by this Agreement to the Collateral Agent while no Event of
Default has occurred and is continuing, upon the occurrence and during the
continuance of any Event of Default the Collateral Agent is hereby appointed the
attorney-in-fact of the Pledgor for the purpose of carrying out the provisions
hereof and taking any action and executing any instruments that the
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Collateral Agent may deem necessary or advisable to accomplish the purposes
hereof, which appointment as attorney-in-fact is irrevocable and coupled with an
interest. Without limiting the generality of the foregoing, so long as the
Collateral Agent shall be entitled under this Article IV to make collections in
respect of the Collateral, the Collateral Agent shall have the right and power
to receive, endorse and collect all checks made payable to the order of the
Pledgor representing any dividend, payment or other distribution in respect of
the Collateral or any part thereof and to give full discharge for the same.
SECTION 4.10. Perfection. Prior to or concurrently with the
execution and delivery of this Agreement, the Pledgor shall (i) file such
financing statements and other documents in such offices as the Collateral Agent
may request to perfect the security interests granted in Article III and (ii)
deliver to the Collateral Agent any certificates representing the Collateral,
accompanied by undated stock powers duly executed in blank.
SECTION 4.11. Termination. Upon the earlier of (a) the date on
which all Secured Obligations shall have been paid in full and the Commitments
of the Lenders under the Credit Agreement shall have expired or been terminated
and (b) the effective date of the transfer of the FCC License to the Company or
any of its Subsidiaries pursuant to Section 18.H of the Space System Contract,
this Agreement shall terminate and all rights to the Collateral shall revert to
the Pledgor, and the Collateral Agent shall forthwith cause to be assigned,
transferred and delivered, against receipt but without any recourse, warranty or
representation whatsoever, any remaining Collateral and money received in
respect thereof, to or on the order of the Pledgor.
SECTION 4.12. Further Assurances. The Pledgor agrees that, from
time to time upon the written request of the Collateral Agent, the Pledgor will
execute and deliver such further documents and do such other acts and things as
the Collateral Agent may reasonably request in order fully to effect the
purposes of this Agreement.
ARTICLE V
MISCELLANEOUS
SECTION 5.01. No Waiver. No failure on the part of the Collateral
Agent or any other Secured Party to exercise, and no course of dealing with
respect to, and no delay in exercising, any right, power or remedy hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise by
the Collateral Agent or any other Secured Party of any right, power or remedy
hereunder preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. The remedies herein are cumulative and are not
exclusive of any remedies provided by law.
SECTION 5.02. Notices. All notices, requests, consents and
demands hereunder shall be in writing and telecopied or delivered to the
intended recipient at the "Address for Notices" specified beneath its name on
the signature pages hereof or, as to any party, at such other address as shall
be designated by such party in a notice to each other party. Except as otherwise
provided in this Agreement, all such communications shall be deemed to have been
duly given when transmitted by telecopier or personally delivered or, in the
case of a mailed notice, upon receipt, in each case given or addressed as
aforesaid.
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SECTION 5.03. Expenses. The Pledgor agrees to reimburse each of
the Lenders and the Collateral Agent for all reasonable costs and expenses of
the Lenders and the Collateral Agent (including, without limitation, the
reasonable fees and expenses of legal counsel) in connection with (a) any
enforcement proceeding hereunder, including, without limitation, all manner of
participation in or other involvement with (i) performance by the Collateral
Agent of any obligations of the Pledgor in respect of the Collateral that the
Pledgor have failed or refused to perform, (ii) bankruptcy, insolvency,
receivership, foreclosure, winding up or liquidation proceedings, or any actual
or attempted sale, or any exchange, enforcement, collection, compromise or
settlement in respect of any of the Collateral, and for the care of the
Collateral and defending or asserting rights and claims of the Collateral Agent
in respect thereof, by litigation or otherwise, (iii) judicial or regulatory
proceedings and (iv) workout, restructuring or other negotiations or proceedings
(whether or not the workout, restructuring or transaction contemplated thereby
is consummated) and (b) the enforcement of this Section, and all such costs and
expenses shall be Secured Obligations entitled to the benefits of the collateral
security provided pursuant to Article III.
SECTION 5.04. Amendments, Etc. The terms of this Agreement may be
waived, altered or amended only by an instrument in writing duly executed by the
Pledgor and the Collateral Agent. Any such amendment or waiver shall be binding
upon the Collateral Agent, each other Secured Party and the Pledgor.
SECTION 5.05. Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the respective successors and assigns
of the Pledgor, the Collateral Agent and each other Secured Party, provided,
however, that the Pledgor shall not assign or transfer its rights hereunder
without the prior written consent of the Collateral Agent.
SECTION 5.06. Captions. The caption and section headings used
herein are for convenience of reference only, are not part of this Agreement and
shall not affect the construction of, or be taken into consideration in
interpreting, this Agreement.
SECTION 5.07. Counterparts. This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract.
SECTION 5.08. Governing Law; Jurisdiction; Consent to Service of
Process.
(a) This Agreement shall be construed in accordance with and
governed by the law of the State of New York.
(b) The Pledgor hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of the Supreme
Court of the State of New York sitting in New York County and of the United
States District Court of the Southern District of New York, and any appellate
court from any thereof, in any action or proceeding arising out of or relating
to this Agreement, or for recognition or enforcement of any judgment, and each
of the parties hereto hereby irrevocably and unconditionally agrees that all
claims in respect of any such action or proceeding may be heard and determined
in such New York State or, to the extent permitted by law, in such Federal
court. Each of the parties hereto agrees that a final judgment
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in any such action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other manner provided by
law. Nothing in this Agreement shall affect any right that the Collateral Agent
or any other Secured Party may otherwise have to bring any action or proceeding
relating to this Agreement against the Pledgor or its properties in the courts
of any jurisdiction.
(c) The Pledgor hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement in any court referred to
in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.
(d) To the extent that the Pledgor may be or become entitled, in
any jurisdiction in which judicial proceedings may at any time be commenced with
respect to this Agreement, to claim for itself or its property or revenues any
immunity from suit, court jurisdiction, attachment prior to judgment, attachment
in aid of execution of a judgment, execution of a judgment or from any other
legal process or remedy relating to its obligations under this Agreement and to
the extent that in any such jurisdiction there may be attributed such an
immunity (whether or not claimed), the Pledgor hereby irrevocably agrees not to
claim and hereby irrevocably waives such immunity to the fullest extent
permitted by the laws of such jurisdiction.
SECTION 5.09. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 5.10. No Third Party Beneficiaries. The agreements of the
parties hereto are solely for the benefit of the Pledgor, the Collateral Agent
and the other Secured Parties, and no other Person (including, without
limitation, the Company) shall have any rights hereunder.
SECTION 5.11. Agents and Attorneys-in-Fact. The Collateral Agent
may employ agents and attorneys-in-fact in connection herewith and shall not be
responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it in good faith.
SECTION 5.12. Severability. Any provision of this Agreement held
to be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality
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and enforceability of the remaining provisions hereof; and the invalidity of a
particular provision in a particular jurisdiction shall not invalidate such
provision in any other jurisdiction.
SECTION 5.13. Security Interest Absolute. The rights and remedies
of the Collateral Agent hereunder, the Liens created hereby and the obligations
of the Pledgor hereunder are absolute, irrevocable and unconditional,
irrespective of:
(a) the validity or enforceability of any of the Secured
Obligations or any Credit Document or any other agreement or instrument relating
thereto;
(b) any amendment to, waiver of, consent to or departure from, or
failure to exercise any right, remedy, power or privileges under or in respect
of, any of the Secured Obligations, any Credit Document or any other agreement
or instrument relating thereto;
(c) the acceleration of the maturity of any of the Secured
Obligations or any other modification of the time of payment thereof;
(d) any substitution, release or exchange of any other security
for or guarantee of any of the Secured Obligations or the failure to create,
preserve, validate, perfect or protect any other Lien granted to, or purported
to be granted to, or in favor of, the Collateral Agent or any other Secured
Party; or
(e) any other event or circumstance whatsoever which might
otherwise constitute a legal or equitable discharge of a surety or a guarantor,
it being the intent of this Section that the obligations of the Pledgor
hereunder shall be absolute, irrevocable and unconditional under any and all
circumstances.
SECTION 5.14. Subrogation. The Pledgor shall not exercise, and
hereby irrevocably waives, any claim, right or remedy that it may now have or
may hereafter acquire against the Company arising under or in connection with
this Agreement, including, without limitation, any claim, right or remedy of
subrogation, contribution, reimbursement, exoneration, indemnification or
participation arising under contract, by Government Rule or otherwise in any
claim, right or remedy of the Collateral Agent or any other Secured Party
against the Company or any other Person or any Collateral which the Collateral
Agent or any other Secured Party may now have or may hereafter acquire. If,
notwithstanding the preceding sentence, any amount shall be paid to the Pledgor
on account of such claim, right or remedy at any time when any of the Secured
Obligations shall not have been paid in full, such amount shall be held by the
Pledgor in trust for the Collateral Agent and the other Secured Parties,
segregated from other funds of the Pledgor, and be turned over to the Collateral
Agent in the exact form received by the Pledgor (duly endorsed by the Pledgor to
the Collateral Agent, if required), to be applied against the Secured
Obligations, whether matured or unmatured, in accordance with this Agreement and
the Depositary Agreement.
SECTION 5.15. Reinstatement. This Agreement and the Lien created
hereunder shall automatically be reinstated if and to the extent that for any
reason any payment by or on behalf of the Company in respect of the Secured
Obligations is rescinded or must otherwise be restored by any holder of the
Secured Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and the Pledgor shall indemnify the Collateral
Agent
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and each other Secured Party on demand for all reasonable costs and expenses
(including, without limitation, fees of counsel) incurred by the Collateral
Agent or such other Secured Party in connection with such rescission or
restoration.
SECTION 5.16. FCC Approval. Notwithstanding any other provision
of this Agreement, no action shall be taken hereunder by the Collateral Agent or
any Lender with respect to any item of Collateral that would constitute or
result in any assignment of the FCC License or any change of control of the
holder of the FCC License without first obtaining prior approval of the FCC, if,
under then existing law, regulations and FCC policies, such assignment or change
of control would require the prior approval of the FCC. The Pledgor agrees to
take (or to cause the Pledgor's Subsidiary which holds the FCC License to take),
at its expense, any action that the Collateral Agent may reasonably request in
order to obtain from the FCC such approval as may be necessary (a) to enable the
Collateral Agent to exercise and enjoy the full rights and benefits granted to
the Collateral Agent by this Agreement and (b) for any action or transaction
contemplated by this Agreement for which such approval is or shall be required
by law, and specifically, without limitation, upon request by the Collateral
Agent, to prepare, sign and file with the FCC the assignor's or transferor's
portion of any application or applications for consent to the assignment of any
license or transfer of control necessary or appropriate under the FCC's rules
and regulations, or for approval of any sale of the Collateral provided by this
Agreement by or on behalf of the Collateral Agent or any assumption by the
Collateral Agent of voting rights relating thereto effected in accordance with
the terms hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Pledge
Agreement to be duly executed and delivered as of the day and year first above
written.
PLEDGOR
MOTOROLA, INC.
By
---------------------------
Name:
Title:
Address for Notices:
Motorola, Inc.
Corporate Offices
1303 East Algonquin Road
Schaumburg, Illinois 60196
Attention: Senior Vice President, Finance
Telecopier No.: 847-538-9969
Telephone No.: 847-538-5866
with copies to:
Motorola, Inc.
Corporate Offices
1303 East Algonquin Road
Schaumburg, Illinois 60196
Attention: Corporate Secretary
Telecopier No.: 847-576-2818
Telephone No.: 847-576-5008
and
Motorola, Inc.
2501 S. Prize Road
Chandler, Arizona 85258
Attention: Vice President -
Law Department, Iridium Matters
Telecopier No.: 602-732-3188
Telephone No.: 602-732-3187
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COLLATERAL AGENT
THE CHASE MANHATTAN BANK,
as Collateral Agent
By
---------------------------
Name:
Title:
Address for Notices:
The Chase Manhattan Bank,
as Collateral Agent
Loan and Agency Services Group
1 Chase Manhattan Plaza
8th Floor
New York, New York 10081
Attention: Winslowe Ogbourne
Telecopier No.: 212-552-5700
Telephone No.: 212-552-7439
with a copy to:
The Chase Manhattan Bank
270 Park Avenue
New York, New York 10017
Attention: Ronald Lepes/William Rotino
Telecopier No.: 212-270-2740/212-270-1724
Telephone No.: 212-270-1554/212-270-1554
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ANNEX 1
PLEDGED STOCK
<TABLE>
<CAPTION>
Certificate Registered
Issuer No. Owner Number of Shares
------ --- ----- ----------------
<S> <C> <C> <C>
Space System 1 Motorola, Inc. 1000 shares of common
License, Inc. stock, par value $.01
</TABLE>
Annex 1 Motorola Pledge Agreement
<PAGE> 297
EXHIBIT I
[FORM OF BORROWING REQUEST]
BORROWING REQUEST
Reference is made to the Senior Secured Credit Agreement dated as
of December 23, 1998 (as amended, supplemented or otherwise modified and in
effect from time to time, the "Credit Agreement") among Iridium Operating LLC, a
Delaware limited liability company (the "Company"), the lenders party thereto
(the "Lenders"), Chase Securities Inc. and Barclays Bank PLC, as Global Lead
Arrangers, The Chase Manhattan Bank, as Administrative Agent (the
"Administrative Agent") and as Collateral Agent and Barclays Bank PLC, as
Documentation Agent. Unless otherwise defined in this Certificate, capitalized
terms used but not defined herein shall have the meanings given to such terms in
the Credit Agreement.
The Company hereby requests a Borrowing from Lenders under the
Credit Agreement as follows:
<TABLE>
<S> <C>
1. The aggregate principal amount of such Borrowing:
$__________
2. The date of such Borrowing: ____________, 199_
3. Such Borrowing(1) is a (check one): __ ABR Borrowing
__ Eurodollar Borrowing
4. If such Borrowing is a Eurodollar Borrowing, the initial
Interest Period therefor is _______ month(s).
</TABLE>
The undersigned officer, in his/her capacity as an officer of the
Company, and the Company certify that:
(i) the representations and warranties of the Company set forth
in the Credit Agreement and of the Company and each other Credit Party
set forth in each of the other Credit Documents to which it is a party
are true and correct on and as of the date hereof to the same extent as
though made on and as of the date hereof, except to the extent such
representations and warranties are stated to have been made solely as of
an earlier date, in which case such representations and warranties were
true and correct on and as of such earlier date;
(ii) to the best knowledge of the Company, the representations
and warranties of each Transaction Party (other than any Credit Party)
set forth in each of the Credit Documents to which such other
Transaction Party is a party are true and correct on and as of the date
hereof to the same extent as though made on and as of the date hereof,
except to the extent such representations and warranties are stated to
have been made solely as
- --------
(1) The initial Borrowing on the Closing Date is required to be
an ABR Borrowing.
Borrowing Request
<PAGE> 298
-2-
of an earlier date, in which case such representations and warranties
were true and correct on and as of such earlier date; and
(iii) at time of and immediately after giving effect to such
Borrowing, no Default has occurred and is continuing;
(iv) after giving effect to such Borrowing, the aggregate
Exposure of the Lenders will not exceed the Commitments; and
(v) each condition precedent specified in Appendix 1 to the
Credit Agreement has been satisfied as of the date hereof (or will be
satisfied on the date of such Borrowing).
Dated: ________, 199_ IRIDIUM OPERATING LLC
By
---------------------
Name:
Title:
Borrowing Request
<PAGE> 1
EXHIBIT 5
================================================================================
IRIDIUM OPERATING LLC
----------------------------------------------------------
SENIOR GUARANTEED CREDIT AGREEMENT
dated as of
December 23, 1998
----------------------------------------------------------
$750,000,000
----------------------------------------------------------
CHASE SECURITIES INC.
and
BARCLAYS BANK PLC,
as Global Lead Arrangers and Joint Book Managers
THE CHASE MANHATTAN BANK,
as Administrative Agent
and
BARCLAYS BANK PLC,
as Documentation Agent
================================================================================
<PAGE> 2
TABLE OF CONTENTS
This Table of Contents is not part of the Agreement to which it
is attached but is inserted for convenience of reference only.
<TABLE>
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<S> <C> <C>
Section 1. Definitions and Accounting Matters...............................................1
1.01 Certain Defined Terms..........................................................1
1.02 Accounting Terms and Determinations...........................................14
1.03 Classes and Types of Loans....................................................14
Section 2. Commitments, Loans and Prepayments..............................................15
2.01 Loans.........................................................................15
2.02 Borrowings....................................................................15
2.03 Changes of Commitments........................................................15
2.04 Commitment Fee................................................................17
2.05 Lending Offices...............................................................17
2.06 Several Obligations; Remedies Independent.....................................17
2.07 Evidence of Debt..............................................................17
2.08 Prepayments and Conversions or Continuations of Loans.........................18
Section 3. Payments of Principal and Interest..............................................19
3.01 Repayment of Loans............................................................19
3.02 Interest......................................................................19
Section 4. Payments; Pro Rata Treatment; Computations; Etc.................................20
4.01 Payments......................................................................20
4.02 Pro Rata Treatment............................................................20
4.03 Computations..................................................................21
4.04 Minimum Amounts...............................................................21
4.05 Certain Notices...............................................................21
4.06 Non-Receipt of Funds by the Administrative Agent..............................22
4.07 Sharing of Payments, Etc......................................................23
Section 5. Yield Protection, Etc...........................................................24
5.01 Additional Costs..............................................................24
5.02 Limitation on Types of Loans..................................................26
5.03 Illegality....................................................................26
5.04 Treatment of Affected Loans...................................................26
5.05 Compensation..................................................................27
5.06 U.S. Taxes....................................................................28
5.07 Replacement of Lenders........................................................29
</TABLE>
(i)
<PAGE> 3
<TABLE>
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<S> <C> <C>
Section 6. Conditions Precedent............................................................30
6.01 Effectiveness.................................................................30
6.02 Initial Loans.................................................................31
6.03 Certain Revolving Loans.......................................................32
Section 7. Representations and Warranties..................................................32
7.01 Legal Existence...............................................................32
7.02 Financial Condition...........................................................33
7.03 Litigation....................................................................33
7.04 No Breach.....................................................................33
7.05 Action........................................................................33
7.06 Approvals.....................................................................34
7.07 Use of Credit.................................................................34
7.08 ERISA.........................................................................34
7.09 Taxes.........................................................................34
7.10 Investment Company Act........................................................34
7.11 Public Utility Holding Company Act............................................34
7.12 Capitalization................................................................34
7.13 Subsidiaries and Certain Investments..........................................35
7.14 True and Complete Disclosure..................................................35
7.15 Year 2000.....................................................................36
Section 8. Covenants of the Company........................................................36
8.01 Financial Statements, Etc.....................................................36
8.02 Litigation....................................................................38
8.03 Existence, Etc................................................................39
8.04 Insurance.....................................................................39
8.05 Prohibition of Fundamental Changes............................................40
8.06 Limitation on Liens...........................................................40
8.07 Indebtedness..................................................................41
8.08 Investments...................................................................42
8.09 Restricted Payments...........................................................42
8.10 Lines of Business.............................................................43
8.11 Transactions with Affiliates..................................................43
8.12 Use of Proceeds...............................................................43
8.13 Modifications of LLC Agreement................................................43
Section 9. Events of Default...............................................................44
Section 10. The Agents.....................................................................47
10.01 Appointment, Powers and Immunities...........................................47
10.03 Defaults.....................................................................48
</TABLE>
(ii)
<PAGE> 4
<TABLE>
<CAPTION>
Page
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<S> <C> <C>
10.04 Rights as a Lender...........................................................48
10.05 Indemnification..............................................................49
10.06 Non-Reliance on the Agents and Other Lenders.................................49
10.07 Failure to Act...............................................................49
10.08 Resignation or Removal of the Agents.........................................49
10.09 Modifications of the Motorola Guarantee Agreement............................50
10.10 Documentation Agent and Global Lead Arrangers................................50
11. Miscellaneous..........................................................................50
11.01 Waiver.......................................................................50
11.02 Notices......................................................................50
11.03 Expenses, Etc................................................................51
11.04 Amendments, Etc..............................................................52
11.05 Successors and Assigns.......................................................53
11.06 Assignments and Participations...............................................53
11.07 Survival.....................................................................55
11.08 Captions.....................................................................55
11.09 Counterparts.................................................................55
11.10 Governing Law; Submission to Jurisdiction....................................55
11.11 Waiver of Jury Trial.........................................................56
11.12 Treatment of Certain Information; Confidentiality............................56
</TABLE>
SCHEDULES
SCHEDULE I - Commitments
SCHEDULE II - Litigation
SCHEDULE III - Subsidiaries and Investments
SCHEDULE IV - Indebtedness
EXHIBITS
EXHIBIT A - Form of Motorola Guarantee Agreement
EXHIBIT B - Form of Opinion of Counsel to the Company
EXHIBIT C-1 - Form of Opinion of Corporate Counsel to Motorola, Inc.
EXHIBIT C-2 - Form of Opinion of Special New York Counsel to Motorola, Inc.
EXHIBIT D - Form of Opinion of Special New York Counsel to the Global Lead
Arrangers and the Agents
EXHIBIT E - Form of Assignment and Acceptance
(iii)
<PAGE> 5
SENIOR GUARANTEED CREDIT AGREEMENT dated as of December 23, 1998,
among:
IRIDIUM OPERATING LLC, a limited liability company duly organized
and validly existing under the laws of the State of Delaware (the "Company");
each of the lenders that is a signatory hereto identified under
the caption "LENDERS" on the signature pages hereto and each lender that becomes
a "Lender" after the date hereof pursuant to Section 11.06(b) hereof
(individually, a "Lender" and, collectively, the "Lenders");
CHASE SECURITIES INC. and BARCLAYS BANK PLC, each in its capacity
as arranger in respect of this Agreement (each in such capacity, together with
its successors in such capacity, a "Global Lead Arranger" and, collectively, the
"Global Lead Arrangers");
THE CHASE MANHATTAN BANK, as administrative agent for the Lenders
(in such capacity, together with its successors in such capacity, the
"Administrative Agent"); and
BARCLAYS BANK PLC, as documentation agent for the Lenders (in
such capacity, together with its successors in such capacity, the "Documentation
Agent").
The Company has requested that the Lenders make loans to it in an
aggregate principal amount not exceeding $750,000,000 at any one time
outstanding (as the same may be increased pursuant to Section 2.03(d) hereof)
and the Lenders are prepared to make such loans upon the terms and conditions
hereof. Accordingly, the parties hereto agree as follows:
Section 1. Definitions and Accounting Matters.
1.01 Certain Defined Terms. As used herein, the following terms
shall have the following meanings (all terms defined in this Section 1.01 or in
other provisions of this Agreement in the singular to have the same meanings
when used in the plural and vice versa):
"Administrative Questionnaire" shall mean an Administrative
Questionnaire in a form supplied by the Administrative Agent.
"Affiliate" shall mean any Person that directly or indirectly
controls, or is under common control with, or is controlled by, the Company. As
used in this definition, "control" (including, with its correlative meanings,
"controlled by" and "under common control with") shall mean possession, directly
or indirectly, of power to direct or cause the direction of management or
policies (whether through ownership of securities or partnership or other equity
interests, by contract or otherwise), provided that, in any event, any Person
that owns directly or indirectly securities having 10% or more of the voting
power for the election of directors or other governing body of a corporation or
10% or more of the partnership or other equity interests of any other Person
(other than as a limited partner of such other Person) will be deemed to control
such corporation or other Person. Notwithstanding the foregoing, (a) no
individual shall be an Affiliate solely by reason of his or her being a
director, officer or employee of the Company or
Senior Guaranteed Credit Agreement
<PAGE> 6
- 2 -
any of its Subsidiaries and (b) none of the Subsidiaries of the Company shall be
Affiliates of the Company.
"Agents" shall mean the Administrative Agent and the
Documentation Agent.
"Aggregate Projected Loan Amount" shall mean, as of the date of
determination thereof, the sum of: (a) the aggregate principal amount of the
Loans outstanding (including any Loans requested to be made) as of such date
(less any prepayments made on such date); (b) accrued and unpaid interest on the
Loans for the period to but excluding such date (less the amount of any interest
payments made on such date); (c) accrued and unpaid commitment fees for the
period to but excluding such date; (d) interest on the Loans outstanding
(including any Loans requested to be made) on such date calculated (i) in the
case of each Base Rate Loan, for the period from and including such date to but
excluding the next succeeding Base Rate Continuation Date which is at least 30
days thereafter (assuming no change in the Base Rate during such period) and
(ii) in the case of each Eurodollar Loan, for the period from and including such
date to but excluding the last day of the then current Interest Period for such
Eurodollar Loan (or, in the case of any Eurodollar Loan requested to be made on
such date, the Interest Period selected by the Company for such Loan); and (e)
commitment fees calculated in accordance with Section 2.04 hereof on the
aggregate unused amount of the Commitments (determined on and as of such date
after giving effect to any Loans requested to be made on such date) for the
period from and including such date to but excluding the next Quarterly Date
which occurs at least 30 days after such date of determination. For avoidance of
doubt, in calculating the Aggregate Projected Loan Amount at any time, any
amount of principal of or interest on the Loans, or any other amount owing
hereunder, theretofore paid by Motorola pursuant to Section 2 of the Motorola
Guarantee Agreement shall continue to be reflected as outstanding and unpaid in
such calculation.
"Applicable Lending Office" shall mean, for each Lender and for
each Type of Loan, the "Lending Office" of such Lender (or of an affiliate of
such Lender) designated for such Type of Loan in the Administrative
Questionnaire or such other office of such Lender (or of an affiliate of such
Lender) as such Lender may from time to time specify to the Administrative Agent
and the Company as the office by which its Loans of such Type are to be made and
maintained.
"Applicable Margin" shall mean 0.75% per annum.
"Assignment and Acceptance" shall mean an Assignment and
Acceptance entered into by a Lender and an assignee (with the consent of any
party whose consent is required by Section 11.06(b) hereof) in the form of
Exhibit E hereto or any other form approved by the Administrative Agent and the
Company.
"Average Life" shall mean, as of the date of determination with
respect to any Indebtedness, the quotient obtained by dividing (a) the sum of
the products of the number of years from the date of determination to the dates
of each successive scheduled principal payment of such Indebtedness multiplied
by the amount of such payment by (b) the sum of all such payments.
Senior Guaranteed Credit Agreement
<PAGE> 7
- 3 -
"Barclays Capital" shall mean Barclays Bank PLC.
"Base Rate" shall mean, for any day, a rate per annum equal to
the higher of (a) the Federal Funds Rate for such day plus 1/2 of 1% and (b) the
Prime Rate for such day. Each change in any interest rate provided for herein
based upon the Base Rate resulting from a change in the Base Rate shall take
effect at the time of such change in the Base Rate.
"Base Rate Continuation Date" shall mean, with respect to any
Base Rate Loan, the date (if any) which is 30 days after the date such Base Rate
Loan is made or Converted from a Eurodollar Loan or (in the event of an existing
Base Rate Loan) the last day of the preceding 30-day period.
"Base Rate Loans" shall mean Loans that bear interest at rates
based upon the Base Rate.
"Basle Accord" shall mean the proposals for risk-based capital
framework described by the Basle Committee on Banking Regulations and
Supervisory Practices in its paper entitled "International Convergence of
Capital Measurement and Capital Standards" dated July 1988, as amended, modified
and supplemented and in effect from time to time or any replacement thereof.
"Business Day" shall mean any day (a) on which commercial banks
are not authorized or required to close in New York City and (b) if such day
relates to a borrowing of, a payment or prepayment of principal of or interest
on, a Conversion of or into, or an Interest Period for, a Eurodollar Loan or a
notice by the Company with respect to any such borrowing, payment, prepayment,
Conversion or Interest Period, that is also a day on which dealings in Dollar
deposits are carried out in the London interbank market.
"Capital Lease Obligations" shall mean, for any Person, all
obligations of such Person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use) Property to the extent such
obligations are required to be classified and accounted for as a capital lease
on a balance sheet of such Person under GAAP, and, for purposes of this
Agreement, the amount of such obligations shall be the capitalized amount
thereof, determined in accordance with GAAP.
"Chase" shall mean The Chase Manhattan Bank.
"Class" shall have the meaning assigned to such term in Section
1.03 hereof.
"Closing Date" shall mean the date (not later than December 31,
1998) upon which the conditions precedent to effectiveness specified in Section
6.01 hereof are satisfied or waived.
"Commitment" shall mean a Revolving Commitment or a Term
Commitment, or any combination thereof (as the context requires).
"Company Default" shall mean any Event of Default under clauses
(a) through (e), (g) and (h) of Section 9 hereof (but, in the case of clauses
(g) and (h), only with respect to the
Senior Guaranteed Credit Agreement
<PAGE> 8
- 4 -
Company or any Subsidiary of the Company which is subject to said clause (g) or
(h)) or any event which with notice or lapse of time or both would become such
an Event of Default.
"Continue", "Continuation" and "Continued" shall refer to the
continuation pursuant to Section 2.08 hereof of a Eurodollar Loan from one
Interest Period to the next Interest Period.
"Convert", "Conversion" and "Converted" shall refer to a
conversion pursuant to Section 2.08 hereof of one Type of Loan into another Type
of Loan, which may be accompanied by the transfer by a Lender (at its sole
discretion) of a Loan from one Applicable Lending Office to another.
"Credit Documents" shall mean, collectively, this Agreement, the
promissory notes (if any) issued hereunder and the Motorola Guarantee Agreement.
"Credit Party" shall mean the Company or Motorola.
"Default" shall mean an Event of Default or an event that with
notice or lapse of time or both would become an Event of Default.
"Dollars" and "$" shall mean lawful money of the United States of
America.
"Environmental Laws" shall mean any and all present and future
U.S. Federal, state, local and foreign laws, rules or regulations, and any
orders or decrees, in each case as now or hereafter in effect, relating to the
regulation or protection of the environment or to emissions, discharges,
releases or threatened releases of pollutants, contaminants, chemicals or toxic
or hazardous substances or wastes into the indoor or outdoor environment,
including, without limitation, ambient air, soil, surface water, ground water,
wetlands, land or subsurface strata, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants, chemicals or toxic or hazardous substances
or wastes.
"Equity Rights" shall mean, with respect to any Person, any
subscriptions, options, warrants, commitments, preemptive rights or agreements
of any kind (including, without limitation, any stockholders' or voting trust
agreements) for the issuance, sale, registration or voting of, or securities
convertible into, any additional shares of equity interests of any type or class
of such Person.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time.
"ERISA Affiliate" of any Person shall mean any corporation or
trade or business that is a member of any group of organizations (i) described
in Section 414(b) or (c) of the U.S. Tax Code of which such Person is a member
and (ii) solely for purposes of potential liability under Section 302(c)(11) of
ERISA and Section 412(c)(11) of the U.S. Tax Code and the lien created under
Section 302(f) of ERISA and Section 412(n) of the U.S. Tax Code, described in
Section 414(m) or (o) of the U.S. Tax Code of which such Person is a member.
Senior Guaranteed Credit Agreement
<PAGE> 9
- 5 -
"Eurodollar Base Rate" shall mean, with respect to any Eurodollar
Loan for any Interest Period, the rate appearing on Page 3750 of the Telerate
Service (or on any successor or substitute page of such Service, or any
successor to or substitute for such Service, providing rate quotations
comparable to those currently provided on such page of such Service, as
determined by the Administrative Agent, from time to time for purposes of
providing quotations of interest rates applicable to Dollar deposits in the
London interbank market) at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period, as the rate for Dollar
deposits with a maturity comparable to such Interest Period. In the event that
such rate is not available at such time for any reason, then the Eurodollar Base
Rate with respect to such Eurodollar Loan for such Interest Period shall be the
rate at which Dollar deposits of $5,000,000 and for a maturity comparable to
such Interest Period are offered by the principal London office of the
Administrative Agent in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.
"Eurodollar Loans" shall mean Loans that bear interest at rates
based on rates referred to in the definition of "Eurodollar Base Rate" in this
Section 1.01.
"Eurodollar Rate" shall mean, for any Eurodollar Loan for any
Interest Period therefor, a rate per annum (rounded upwards, if necessary, to
the nearest 1/100 of 1%) determined by the Administrative Agent to be equal to
the Eurodollar Base Rate for such Loan for such Interest Period divided by 1
minus the Reserve Requirement (if any) for such Loan for such Interest Period.
"Events of Default" shall have the meaning assigned to such term
in Section 9 hereof.
"Existing Guaranteed Credit Agreement" shall mean the Credit
Agreement dated as of August 21, 1996, among the Company (as transferee of
Iridium LLC), the lenders party thereto, the Global Lead Arrangers, the
Administrative Agent and the Documentation Agent, as amended by Amendment No. 1
thereto dated as of December 19, 1997 and in effect immediately prior to the
Closing Date.
"Existing Secured Credit Agreement" shall mean the Credit
Agreement dated as of December 19, 1997, among the Company, the lenders party
thereto, the Global Lead Arrangers, the Administrative Agent and the
Documentation Agent.
"Existing Senior Subordinated Notes" shall mean the Indebtedness
of the Company (as transferee of Iridium LLC) in respect of the 14 1/2% Senior
Subordinated Discount Notes due 2006 in an aggregate fully accreted principal
amount at the maturity of $480,000,000.
"Federal Funds Rate" shall mean, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day, provided that (a) if the day for which such rate is to
be determined is not a Business Day, the Federal Funds Rate for such day shall
be such rate on
Senior Guaranteed Credit Agreement
<PAGE> 10
- 6 -
such transactions on the next preceding Business Day as so published on the next
succeeding Business Day and (b) if such rate is not so published for any
Business Day, the Federal Funds Rate for such Business Day shall be the average
rate charged to Chase on such Business Day on such transactions as determined by
the Administrative Agent.
"GAAP" shall mean generally accepted accounting principles
applied on a basis consistent with those that, in accordance with the last
sentence of Section 1.02(a) hereof, are to be used in making the calculations
for purposes of determining compliance with this Agreement.
"Governmental Approval" shall mean any permit, license, variance,
certification, no-action letter, clearance, exemption or other approval issued
or granted by any Governmental Authority.
"Governmental Authority" shall mean any nation or government, any
state, province, territory or other political subdivision thereof, any central
bank or other equivalent entity and any other agency, body, department, bureau,
authority, instrumentality or other entity exercising executive, legislative,
judicial, regulatory, monetary, taxing or administrative functions of or
pertaining to government.
"Guarantee" shall mean a guarantee, an endorsement, a contingent
agreement to purchase or to furnish funds for the payment or maintenance of, or
otherwise to be or become contingently liable under or with respect to, the
Indebtedness, other obligations, net worth, working capital or earnings of any
Person, or a guarantee of the payment of dividends or other distributions upon
the stock or equity interests of any Person, or an agreement to purchase, sell
or lease (as lessee or lessor) Property, products, materials, supplies or
services primarily for the purpose of enabling a debtor to make payment of such
debtor's obligations or an agreement to assure a creditor against loss, and
including, without limitation, causing a bank or other financial institution to
issue a letter of credit or other similar instrument for the benefit of another
Person, but excluding endorsements for collection or deposit in the ordinary
course of business. The terms "Guarantee" and "Guaranteed" used as a verb shall
have a correlative meaning.
"Indebtedness" shall mean, for any Person, without duplication,
(a) all obligations of such Person for borrowed money or with respect to
deposits or advances of any kind, (b) all obligations of such Person evidenced
by bonds, debentures, notes or similar instruments, (c) all obligations of such
Person under conditional sale or other title retention agreements relating to
property acquired by such Person, (d) all obligations of such Person in respect
of the deferred purchase price of property or services (excluding trade accounts
payable or accrued liabilities arising in the ordinary course of business that
are not overdue by more than 30 days or that are being contested in good faith),
including without limitation any Vendor Financing, (e) all Indebtedness of
others secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such Person, whether or not the Indebtedness secured thereby has
been assumed, (f) all Guarantees by such Person of Indebtedness of others, (g)
all Capital Lease Obligations of such Person, (h) all obligations, contingent or
otherwise, of such Person as an account party in respect of letters of credit
and letters of guaranty (excluding any ordinary trade credit), (i) all
obligations, contingent or otherwise, of such Person in respect of bankers'
acceptances and (j) all obligations, contingent or otherwise, of such Person to
redeem mandatorily redeemable preferred stock. The
Senior Guaranteed Credit Agreement
<PAGE> 11
- 7 -
Indebtedness of any Person shall include, without duplication, the Indebtedness
of any other entity (including any partnership in which such Person is a general
partner) to the extent such Person is liable therefor as a result of such
Person's ownership interest in or other relationship with such entity, except to
the extent the terms of such Indebtedness provide that such Person is not liable
therefor. Indebtedness shall refer to the principal amount thereof or, in the
case of Indebtedness issued at a discount, the accreted value thereof. In no
event shall Indebtedness include any deposit, advance or similar arrangement in
connection with the Iridium clearinghouse function (as described in Article IV
of the Gateway Authorization Agreements between the investors party thereto and
the Company).
"Information Memorandum" shall mean the Confidential Information
Memorandum dated November 1998 with respect to the credit facilities provided
under this Agreement.
"Initial Term Loan Amount" shall mean, with respect to each Term
Lender, the amount set forth opposite the name of such Term Lender under the
caption "Initial Term Loan Amount" on Schedule 1 hereto.
"Interest Period" shall mean, with respect to any Eurodollar
Loan, each period commencing on the date such Eurodollar Loan is made or
Converted from a Base Rate Loan or (in the event of a Continuation) the last day
of the next preceding Interest Period for such Loan and ending on the
numerically corresponding day in the first, second, third, sixth or (with the
consent of each Lender) ninth or twelfth calendar month thereafter, as the
Company may select as provided in Section 4.05 hereof, except that each Interest
Period that commences on the last Business Day of a calendar month (or on any
day for which there is no numerically corresponding day in the appropriate
subsequent calendar month) shall end on the last Business Day of the appropriate
subsequent calendar month. Notwithstanding the foregoing: (i) if any Interest
Period with respect to a Revolving Loan would otherwise end after the Revolving
Commitment Termination Date, such Interest Period shall end on the Revolving
Commitment Termination Date; (ii) if any Interest Period with respect to a Term
Loan would otherwise end after the Term Loan Maturity Date, such Interest Period
shall end on the Term Loan Maturity Date; (iii) each Interest Period that would
otherwise end on a day that is not a Business Day shall end on the next
succeeding Business Day (or, if such next succeeding Business Day falls in the
next succeeding calendar month, on the next preceding Business Day); and (iv)
notwithstanding clauses (i) and (ii) above, no Interest Period shall have a
duration of less than one month and, if the Interest Period for any Eurodollar
Loan would otherwise be a shorter period, such Interest Period shall not be
available hereunder.
"Interest Rate Protection Agreement" shall mean, for any Person,
an interest rate swap, cap or collar agreement or similar arrangement between
such Person and one or more financial institutions providing for the transfer or
mitigation of interest rate risks either generally or under specific
contingencies.
"Investment" shall mean, for any Person: (a) the acquisition
(whether for cash, Property, services or securities or otherwise) of bonds,
notes, debentures, equity interests of any type or class or other securities of
any other Person or any agreement to make any such acquisition (including,
without limitation, any "short sale" or any sale of any securities at a time
Senior Guaranteed Credit Agreement
<PAGE> 12
- 8 -
when such securities are not owned by the Person entering into such sale); (b)
the making of any deposit with, or advance, loan or other extension of credit
to, any other Person (including the purchase of Property from another Person
subject to an understanding or agreement, contingent or otherwise, to resell
such Property to such Person), but excluding any such deposit, advance, loan or
extension of credit having a term not exceeding 180 days arising in connection
with the sale of inventory, services or supplies by such Person in the ordinary
course of business; (c) the entering into of any Guarantee of, or other
contingent obligation with respect to, Indebtedness or other liability of any
other Person and (without duplication) any amount committed to be advanced, lent
or extended to such Person; or (d) the entering into of any Interest Rate
Protection Agreement.
"Iridium Business" shall mean the designing, development,
acquisition, construction, manufacture, installation, leasing, licensing,
testing, completion, delivery, acceptance, activation, operation, maintenance,
restoration, improvement, use and ownership of the Iridium System, the financing
thereof (whether through the issuance of debt or equity securities or otherwise)
and all systems, property, business, activities and services of the Company and
its Subsidiaries related thereto or to any Related Business.
"Iridium LLC" shall mean Iridium LLC, a Delaware limited
liability company.
"Iridium System" shall mean the IRIDIUM(R) global wireless
communications system described in the Information Memorandum.
"Lien" shall mean, with respect to any Property, any mortgage,
lien, pledge, charge, security interest or encumbrance of any kind in respect of
such Property. For purposes of this Agreement, a Person shall be deemed to own
subject to a Lien any Property that it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale agreement, capital
lease or other title retention agreement (other than an operating lease)
relating to such Property.
"LLC Agreement" shall mean the Limited Liability Company
Agreement of the Company entered into by Iridium LLC as the sole member of the
Company, dated as of December 18, 1997, pursuant to which the Company is
organized, as amended and in effect on the date hereof and as the same shall,
subject to Section 8.13 hereof, hereafter be amended and otherwise modified and
in effect from time to time.
"Loans" shall mean, collectively, the Revolving Loans and the
Term Loans.
"Majority Lenders" shall mean, at any time, Lenders having more
than 50% of the sum (determined without duplication) of (a) the aggregate unused
amount, if any, of the Commitments at such time plus (b) the aggregate
outstanding principal amount of the Loans at such time.
"Majority Revolving Lenders" shall mean, at any time, Revolving
Lenders having more than 50% of the sum (determined without duplication) of (a)
the aggregate unused amount, if any, of the Revolving Commitments at such time
plus (b) the aggregate outstanding principal amount of the Revolving Loans at
such time.
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"Majority Term Lenders" shall mean, at any time, Term Lenders
having more than 50% of the sum (determined without duplication) of (a) the
aggregate unused amount, if any, of the Term Commitments at such time plus (b)
the aggregate outstanding principal amount of the Term Loans at such time.
"Margin Stock" shall mean "margin stock" within the meaning of
Regulations T, U and X.
"Material Adverse Effect" shall mean a material adverse effect on
(a) the financial condition of the Company and its Subsidiaries taken as a whole
or (b) the validity or enforceability against the Company or Motorola of any of
the Credit Documents if, in the case of any of the foregoing, it could
reasonably be likely to have an adverse effect on the likelihood of the payment
of the principal of or interest on the Loans or other amounts payable in
connection therewith, taking into account the Motorola Guarantee Agreement.
"Maximum Available Loan Amount" shall mean, as of the date of
determination thereof, an amount (rounded downward to the nearest $1,000,000)
equal to 99-1/3% of the sum of (a) the aggregate unused amount, if any, of the
Commitments as of such date plus (b) the aggregate outstanding principal amount
of the Loans as of such date.
"Moody's" shall mean Moody's Investors Service, Inc. (or any
successor to the rating business thereof).
"Motorola" shall mean Motorola, Inc., a Delaware corporation.
"Motorola Default" shall mean any Event of Default under clauses
(f) through (n) of Section 9 hereof (but, in the case of clauses (g) and (h),
only with respect to Motorola or any of the Motorola Domestic Subsidiaries) or
any event which with notice or lapse of time or both would become such an Event
of Default.
"Motorola Domestic Subsidiaries" shall have the meaning assigned
to such term in the Motorola Guarantee Agreement.
"Motorola Guarantee Agreement" shall mean the Guarantee Agreement
dated as of the date hereof substantially in the form of Exhibit A hereto
between Motorola and the Administrative Agent, as the same shall be modified and
supplemented and in effect from time to time.
"Motorola's Net Worth" shall have the meaning assigned to such
term in Section 9(k) hereof.
"Multiemployer Plan" of any Person shall mean a multiemployer
plan defined as such in Section 3(37) of ERISA to which contributions have been
made by such Person or any ERISA Affiliate of such Person and that is covered by
Title IV of ERISA.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
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"Permitted Investments" shall mean:
(a) direct obligations of, or obligations guaranteed by, the
United States of America for the payment of which obligations or
guarantee the full faith and credit of the United States of America is
pledged and which have a remaining Average Life of not more than 365
days from the date of acquisition thereof;
(b) investments in commercial paper maturing not more than 270
days after the date of acquisition thereof and having, at such date of
acquisition, a credit rating of at least P-1 from S&P or A-1 from
Moody's (or such similar equivalent rating by at least one "nationally
recognized statistical rating organization" (as defined in Rule 436
under the Securities Act of 1933, as amended));
(c) investments in certificates of deposit, banker's acceptances
and time deposits maturing not more than 270 days after the date of
acquisition thereof issued or guaranteed by or placed with, and money
market deposit accounts issued or offered by, any commercial bank or
trust company organized under the laws of the United States of America
or any State thereof or any other country which is a member of the
Organization for Economic Cooperation and Development, in each case
which has a combined capital, surplus and undivided profits of not less
than $500,000,000 or its equivalent in foreign currency, and whose debt
is rated at least A- by S&P or A-3 by Moody's (or such similar
equivalent rating by a "nationally recognized statistical rating
organization" (as defined above));
(d) repurchase obligations with a term of not more than 7 days
for securities described in clause (a) of this definition and entered
into with a financial institution which has a combined capital, surplus
and undivided profits of not less than $500,000,000 or its equivalent in
foreign currency, and whose debt is rated at least A- by S&P or A-3 by
Moody's (or such similar equivalent rating by a "nationally recognized
statistical rating organization" (as defined above));
(e) Interest Rate Protection Agreements entered into by the
Company with one or more counterparties to protect itself from
fluctuations in floating interest rates with respect to Indebtedness
hereunder and other Indebtedness permitted pursuant to Section 8.07
hereof;
(f) required deposits under the Secured Credit Agreement or any
of the Security Documents referred to therein; and
(g) any mutual or similar fund investing exclusively in Permitted
Investments of the type described in clauses (a), (b), (c) and/or (d)
above.
"Person" shall mean any individual, corporation, company,
voluntary association, partnership, limited liability company, joint venture,
trust, unincorporated organization or Governmental Authority.
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"Plan" of any Person shall mean an employee benefit or other plan
established or maintained by such Person or any ERISA Affiliate of such Person
and that is covered by Title IV of ERISA, other than a Multiemployer Plan.
"Post-Default Rate" shall mean a rate per annum equal to 2% plus
the Base Rate as in effect from time to time, provided that, with respect to
principal of a Eurodollar Loan that shall become due (whether at stated
maturity, by acceleration, by prepayment or otherwise) on a day other than the
last day of the Interest Period therefor, the "Post-Default Rate" shall be, for
the period from and including such due date to but excluding the last day of
such Interest Period, 2% plus the interest rate for such Loan as provided in
Section 3.02(b) hereof and, thereafter, the rate provided for above in this
definition.
"Prime Rate" shall mean the rate of interest from time to time
announced by Chase at its principal office in New York, New York as its prime
commercial lending rate.
"Property" shall mean any right or interest in or to property of
any kind whatsoever, whether real, personal or mixed and whether tangible or
intangible.
"Quarterly Dates" shall mean the last Business Day of March,
June, September and December in each year, the first of which shall be the first
such day after the date hereof.
"Regulations A, D, T, U and X" shall mean, respectively,
Regulations A, D, T, U and X of the Board of Governors of the Federal Reserve
System (or any successor), as the same may be modified and supplemented and in
effect from time to time.
"Regulatory Change" shall mean, with respect to any Lender, any
change after the date hereof in U.S. Federal, state or foreign law or
regulations (including, without limitation, Regulation D) or the adoption or
making after such date of any interpretation, directive or request applying to a
class of banks or other institutions including such Lender of or under any U.S.
Federal, state or foreign law or regulations (whether or not having the force of
law and whether or not failure to comply therewith would be unlawful) by any
court or Governmental Authority charged with the interpretation or
administration thereof.
"Related Business" shall mean the business of developing, owning,
engaging in and dealing with all or any part of the business of the provision of
telecommunications services and businesses and (a) reasonably related extensions
thereof, including but not limited to the manufacture, purchase, ownership,
operation, leasing, licensing, financing and selling of, and generally dealing
in or with, communications satellites, earth stations, gateways, ground
infrastructure and subscriber equipment, used or intended for use with
telecommunications services and businesses and (b) any other activities that are
reasonably related to the provision of telecommunications services and
businesses.
"Reserve Requirement" shall mean, for any Interest Period for any
Eurodollar Loan, the average maximum rate at which reserves (including, without
limitation, any marginal, supplemental or emergency reserves) are required to be
maintained during such Interest Period under Regulation D by member banks of the
Federal Reserve System in New York City with deposits exceeding one billion
Dollars against "Eurocurrency liabilities" (as such term is used in
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Regulation D). Without limiting the effect of the foregoing, the Reserve
Requirement shall include any other reserves required to be maintained by such
member banks by reason of any Regulatory Change with respect to (i) any category
of liabilities that includes deposits by reference to which the Eurodollar Base
Rate is to be determined as provided in the definition of "Eurodollar Base Rate"
in this Section 1.01 or (ii) any category of extensions of credit or other
assets that includes Eurodollar Loans.
"Reserved Term Commitment" shall mean $5,000,000 (as the same may
be increased pursuant to Section 2.03(d) hereof); provided that on the Term Loan
Maturity Date the Reserved Term Commitment shall be automatically reduced to
zero.
"Restricted Payment" shall mean (a) distributions of the Company
(in cash, Property or obligations) on, or other payments on account of, or the
setting apart of money for a sinking or other analogous fund for, or the
purchase, redemption, retirement or other acquisition of, any portion of any
membership or other equity interest in the Company or of any warrants, options
or other rights to acquire any such membership or equity interest (or to make
any payments to any Person where the amount thereof is calculated with reference
to fair market or equity value of the Company or any Subsidiary), but excluding
any dividend payable solely in equity interests of the Company, and (b) payments
in respect of the Existing Senior Subordinated Notes.
"Revolving Commitment" shall mean, as to each Revolving Lender,
the obligation of such Revolving Lender to make Revolving Loans in an aggregate
principal amount at any one time outstanding up to but not exceeding the amount
set forth opposite the name of such Revolving Lender under the caption
"Revolving Commitments" on Schedule I hereto or, in the case of a Person that
becomes a Lender pursuant to an assignment permitted under Section 11.06(b)
hereof, as specified in the respective Assignment and Acceptance or other
instrument of assignment pursuant to which such assignment is effected (as the
same may be reduced at any time or from time to time pursuant to Section 2.03
hereof).
"Revolving Commitment Termination Date" shall mean December 31,
2001.
"Revolving Lender" shall mean a Lender with a Revolving
Commitment or, if the Revolving Commitments have terminated or expired, a Lender
holding Revolving Loans.
"Revolving Loans" shall mean the loans provided for in Section
2.01(a) hereof, which may be Base Rate Loans and/or Eurodollar Loans.
"S&P" shall mean Standard & Poor's Ratings Services, a division
of The McGraw-Hill Companies, Inc. (or any successor to the rating business
thereof).
"Secured Credit Agreement" shall mean the Senior Secured Credit
Agreement dated as of the date hereof, among the Company, the lenders party
thereto, the Global Lead Arrangers, the Administrative Agent and the
Documentation Agent providing for loans in an aggregate principal amount not to
exceed $800,000,000, as the same shall be modified and supplemented and in
effect from time to time.
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"Subsidiary" shall mean, with respect to any Person, any
corporation, partnership, limited liability company or other entity of which at
least a majority of the securities or other equity interests having by the terms
thereof ordinary voting power to elect a majority of the board of directors or
other persons performing similar functions of such corporation, partnership,
limited liability company or other entity (irrespective of whether or not at the
time securities or other equity interests of any other class or classes of such
corporation, partnership, limited liability company or other entity shall have
or might have voting power by reason of the happening of any contingency) is at
the time directly or indirectly owned or controlled by such Person or one or
more Subsidiaries of such Person or by such Person and one or more Subsidiaries
of such Person. Notwithstanding the foregoing, in no event shall Iridium LLC be
a Subsidiary of Motorola.
"Term Commitment" shall mean, with respect to each Term Lender,
the amount set forth opposite the name of such Term Lender under the caption
"Term Commitments" on Schedule I hereto or, in the case of a Person that becomes
a Lender pursuant to an assignment permitted under Section 11.06(b) hereof or in
connection with an increase in the Term Commitments pursuant to Section 2.03(d)
hereof, as specified in the respective Assignment and Acceptance, other
instrument of assignment or other agreement pursuant to which such assignment or
such increase is effected (as the same may be reduced or increased at any time
or from time to time pursuant to Section 2.03 hereof).
"Term Lender" shall mean a Lender with a Term Commitment or, if
the Term Commitments have terminated or expired, a Lender holding a Term Loan.
"Term Loan Maturity Date" shall mean December 29, 2000.
"Term Loans" shall mean the loans provided for in Sections
2.01(b) and 2.03(d)(iii) hereof, which may be Base Rate Loans and/or Eurodollar
Loans.
"Type" shall have the meaning assigned to such term in Section
1.03 hereof.
"U.S. Bankruptcy Code" shall mean the United States Federal
Bankruptcy Code of 1978, as amended from time to time.
"U.S. Tax Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
"Vendor Financing" shall mean any financing, deferral of payment
for more than 120 days or similar arrangement provided by any supplier or
manufacturer of goods, property or services to the Company or any of its
Subsidiaries in respect of the goods, property or services provided by such
supplier or manufacturer in connection with the Iridium Business.
"Wholly Owned Subsidiary" shall mean, with respect to any Person,
any corporation, partnership, limited liability company or other entity of which
all of the equity interests (other than, in the case of a corporation,
directors' qualifying shares) are directly or indirectly owned or controlled by
such Person or one or more Wholly Owned Subsidiaries of such Person or by such
Person and one or more Wholly Owned Subsidiaries of such Person.
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1.02 Accounting Terms and Determinations.
(a) Except as otherwise expressly provided herein, all accounting
terms used herein shall be interpreted, and all financial statements and
certificates and reports as to financial matters required to be delivered to the
Administrative Agent or the Lenders hereunder shall (unless otherwise disclosed
to the Administrative Agent or the Lenders in writing at the time of delivery
thereof in the manner described in paragraph (b) below) be prepared, in
accordance with generally accepted accounting principles applied on a basis
consistent with those used in the preparation of the latest financial statements
furnished to the Administrative Agent or the Lenders hereunder (which, prior to
the delivery of the first financial statements under Section 8.01 hereof, shall
mean the audited financial statements as at December 31, 1997 referred to in
Section 7.02 hereof). All calculations made for the purposes of determining
compliance with this Agreement shall (except as otherwise expressly provided
herein) be made by application of generally accepted accounting principles
applied on a basis consistent with those used in the preparation of the latest
annual or quarterly financial statements furnished to the Administrative Agent
or the Lenders pursuant to Section 8.01 hereof (or, prior to the delivery of the
first financial statements under Section 8.01 hereof, used in the preparation of
the audited financial statements as at December 31, 1997 referred to in Section
7.02 hereof) unless (i) the Company shall have objected to determining such
compliance on such basis at the time of delivery of such financial statements or
(ii) the Majority Lenders shall so object in writing within 30 days after
delivery of such financial statements, in either of which events such
calculations shall be made on a basis consistent with those used in the
preparation of the latest financial statements as to which such objection shall
not have been made (which, if objection is made in respect of the first
financial statements delivered under Section 8.01 hereof, shall mean the audited
financial statements as at December 31, 1997 referred to in Section 7.02
hereof).
(b) The Company shall deliver to the Administrative Agent (for
distribution to the Lenders) at the same time as the delivery of any annual or
quarterly financial statement under Section 8.01 hereof (i) a description in
reasonable detail of any material variation between the application of
accounting principles employed in the preparation of such statement and the
application of accounting principles employed in the preparation of the next
preceding annual or quarterly financial statements as to which no objection has
been made in accordance with the last sentence of subsection (a) above and (ii)
reasonable estimates of the difference between such statements arising as a
consequence thereof.
(c) The Company will not change the last day of its fiscal year
from December 31 of each year, or the last days of the first three fiscal
quarters in each of its fiscal years from March 31, June 30 and September 30 of
each year, respectively.
1.03 Classes and Types of Loans. Loans hereunder are
distinguished by "Class" and "Type". The "Class" of a Loan (or of a Commitment
to make a Loan) refers to whether such Loan is a Revolving Loan or Term Loan,
each of which constitutes a Class. The "Type" of a Loan refers to whether such
Loan is a Base Rate Loan or a Eurodollar Loan, each of which constitutes a Type.
Loans may be identified by Class and Type.
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Section 2. Commitments, Loans and Prepayments.
2.01 Loans.
(a) Revolving Loans. Each Revolving Lender severally agrees, on
the terms and conditions of this Agreement, to make Revolving Loans to the
Company in Dollars during the period from and including the Closing Date to but
not including the Revolving Commitment Termination Date in an aggregate
principal amount at any one time outstanding up to but not exceeding the amount
of the Revolving Commitment of such Lender as in effect from time to time.
Subject to the terms and conditions of this Agreement (including, without
limitation, paragraph (c) below), during such period the Company may borrow,
repay and reborrow the amount of the Revolving Commitments by means of Base Rate
Loans and Eurodollar Loans and may Convert Revolving Loans of one Type into
Revolving Loans of another Type (as provided in Section 2.08 hereof) or Continue
Revolving Loans of one Type as Revolving Loans of the same Type (as provided in
Section 2.08 hereof).
(b) Term Loans. Each Term Lender severally agrees, on the terms
and conditions of this Agreement, to make a single Term Loan to the Company in
Dollars on the Closing Date in a principal amount equal to the Initial Term Loan
Amount of such Lender. Subject to the terms and conditions of this Agreement
(including, without limitation, paragraph (c) below), the Company may Convert
Term Loans of one Type into Term Loans of another Type (as provided in Section
2.08 hereof) or Continue Term Loans of one Type as Term Loans of the same Type
(as provided in Section 2.08 hereof). Once prepaid, a Term Loan may not be
reborrowed.
(c) Certain Limitations. Anything herein to the contrary
notwithstanding, (i) no more than ten separate Interest Periods in respect of
Eurodollar Loans of all Classes may be outstanding at any one time and (ii) the
Loans made on the Closing Date shall be Base Rate Loans.
2.02 Borrowings. The Company shall give the Administrative Agent
notice of each borrowing hereunder as provided in Section 4.05 hereof. Not later
than 1:00 p.m. New York time on the date specified for each borrowing hereunder,
each Lender shall make available the amount of the Loan or Loans to be made by
it on such date to the Administrative Agent, at an account in New York, New York
specified by the Administrative Agent, in immediately available funds, for
account of the Company. The amount so received by the Administrative Agent
shall, subject to the terms and conditions of this Agreement, be made available
to the Company by depositing the same, in immediately available funds, in an
account of the Company designated by the Company and maintained with Chase in
New York, New York.
2.03 Changes of Commitments.
(a) The aggregate amount of the Revolving Commitments shall be
automatically reduced to zero on the Revolving Commitment Termination Date. The
aggregate amount of the Term Commitments shall be automatically reduced to the
Reserved Term Commitment at 5:00 p.m., New York City time, on the Closing Date
and to zero on the Term Loan Maturity Date. The aggregate amount of the Term
Commitments may be increased pursuant to paragraph (d) of this Section 2.03.
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(b) The Company shall have the right at any time or from time to
time (i) so long as no Revolving Loans are outstanding, to terminate the
Revolving Commitments and (ii) to reduce the aggregate unused amount of the
Revolving Commitments; provided that (x) the Company shall give notice of each
such termination or reduction as provided in Section 4.05 hereof and (y) each
partial reduction shall be in an aggregate amount at least equal to $25,000,000
(or a larger multiple of $1,000,000).
(c) The Commitments of any Class once terminated or reduced may
not be reinstated.
(d) (i) The Company shall have the right, with the consent of the
Administrative Agent and Motorola, at any time to increase the aggregate
amount of the Term Commitments as in effect on the date hereof by an
amount not exceeding $750,000,000 by (a) adding to this Agreement
(pursuant to one or more joinder agreements in form and substance
reasonably satisfactory to the Administrative Agent) one or more lenders
with a Term Commitment or Term Commitments of up to the amount (or
aggregate amount) of such increase (which lender or lenders shall
thereupon become "Term Lenders" hereunder) and/or (b) enabling any Term
Lender or Term Lenders to increase its (or their) Term Commitment (or
Term Commitments) up to the amount of any such increase (provided that
in no event shall any Term Lender's Term Commitment be increased without
the prior consent of such Term Lender). The Company shall not be
permitted to increase the Term Commitments more than three times under
this Section 2.03(d). Each such increase in the Term Commitments shall
be in a minimum amount at least equal to $50,000,000 (or a larger
multiple of $5,000,000).
(ii) The increase in Term Commitments and the obligation of each
relevant Term Lender to make a Term Loan pursuant to this Section
2.03(d) are subject to the conditions precedent that: (w) the Company
shall have given the Administrative Agent notice of such increase at
least 3 Business Days prior to the proposed date of such increase (the
"Increased Term Commitment Date"); (x) both immediately prior to the
making of such Term Loan or Term Loans and also giving effect thereto
and the intended use thereof, each of the conditions set forth in
clauses (a) through (e) of Section 6.03 hereof shall be satisfied; (y)
such increase in Term Commitments and the making of such Term Loan or
Term Loans would not result in any one Lender having more than 20% of
the sum (determined without duplication) of the aggregate unused amount
of the Commitments plus the aggregate outstanding principal amount of
the Loans; and (z) the Agents shall have received the following
documents, each of which shall be reasonably satisfactory to the Agents
(or, to the extent specified herein, the Term Lenders making such Term
Loan(s)): (A) an amendment to the Motorola Guarantee Agreement that
increases the liability of Motorola thereunder by an amount at least
equal to the amount of the increase in the Term Commitments, duly
executed and delivered by Motorola and the Administrative Agent; (B) a
certificate of a senior officer of the Company, dated the Increased Term
Commitment Date, to the effect set forth in clauses (a), (b) and (e) of
Section 6.03 hereof; (C) a certificate of a senior officer of Motorola,
dated the Increased Term Commitment Date, to the effect set forth in
clauses (c) and (d) of Section 6.03 hereof; and (D) for each of the
Company and Motorola, such proof of corporate or other
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authority, legal opinions and other documents as the Agents or any
relevant Term Lender may reasonably request; provided that the
conditions precedent set forth in this clause (ii) (other than in
clauses (y) and (z)(A)) may, with respect to any such Term Loan, be
waived by the Term Lender making such Term Loan without the consent of
the Agents or any other Lender.
(iii) On the Increased Term Commitment Date, (a) each relevant
Term Lender shall, on the terms and subject to the conditions of this
Agreement, make a single Term Loan to the Company in an amount equal to
99-1/3% of the amount of such Term Lender's Term Commitment (or the
amount of the increase in such Term Lender's Term Commitment) as agreed
under clause (i) above and (b) the Reserved Term Commitment shall be
increased by an amount equal to 2/3 of 1% of the amount by which the
aggregate amount of the Term Commitments is increased on such date.
2.04 Commitment Fee. The Company shall pay to the Administrative
Agent for account of each Lender a commitment fee at a rate per annum equal to
0.25%, (a) in the case of the Revolving Commitments, on the daily average unused
amount of such Lender's Revolving Commitment, for the period from and including
the Closing Date to but not including the earlier of the date such Revolving
Commitment is terminated and the Revolving Commitment Termination Date, and (b)
in the case of the Term Commitments, on the daily average unused amount of such
Lender's Term Commitments for the period from and including the Closing Date to
but not including the earlier of the date such Term Commitment is terminated and
the Term Loan Maturity Date. Accrued commitment fees shall be payable on each
Quarterly Date and on the earlier of the date the relevant Commitments are
terminated and the Revolving Commitment Termination Date.
2.05 Lending Offices. The Loans of each Type made by each Lender
shall be made and maintained at such Lender's Applicable Lending Office for
Loans of such Type.
2.06 Several Obligations; Remedies Independent. The failure of
any Lender to make any Loan to be made by it on the date specified therefor
shall not relieve any other Lender of its obligation to make its Loan on such
date, but neither any Lender nor any Agent shall be responsible for the failure
of any other Lender to make a Loan to be made by such other Lender, and (except
as otherwise provided in Section 4.06 hereof) no Lender shall have any
obligation to either Agent or any other Lender for the failure by such Lender to
make any Loan required to be made by such Lender. The amounts payable by the
Company at any time hereunder to each Lender shall be a separate and independent
debt and each Lender shall be entitled to protect and enforce its rights arising
out of this Agreement, and it shall not be necessary for any other Lender or any
Agent to consent to, or be joined as an additional party in, any proceedings for
such purposes.
2.07 Evidence of Debt.
(a) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the Company to
such Lender resulting from each Loan made by such Lender, including the amounts
of principal and interest payable and paid to such Lender from time to time
hereunder.
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(b) The Administrative Agent shall maintain accounts in which it
shall record (i) the name of the Company and amount of each Loan made hereunder,
the Class and Type thereof and the Interest Period applicable thereto, (ii) the
amount of any principal or interest due and payable or to become due and payable
from the Company to each Lender hereunder and (iii) the amount of any sum
received by the Administrative Agent from the Company hereunder for the account
of the Lenders and each Lender's share thereof.
(c) The entries made in the accounts maintained pursuant to
paragraph (a) or (b) of this Section 2.07 shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that the
failure of any Lender or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the obligation of the Company
to repay its Loans in accordance with the terms of this Agreement.
(d) Any Lender may request that Loans of any Class made by it be
evidenced by a promissory note. In such event, the Company shall prepare,
execute and deliver to such Lender a promissory note payable to the order of
such Lender (or, if requested by such Lender, to such Lender and its registered
assigns) and in a form approved by the Administrative Agent and the Company.
Thereafter, the Loans of the Company evidenced by such promissory note and
interest thereon shall at all times (including after assignment pursuant to
Section 11.06 hereof) be represented by one or more promissory notes in such
form payable to the order of the payee named therein (or, if such promissory
note is a registered note, to such payee and its registered assigns).
2.08 Prepayments and Conversions or Continuations of Loans.
(a) Subject to Section 4.04 hereof, the Company shall have the
right to prepay Loans, or to Convert Loans of one Type into Loans of another
Type or Continue Loans of one Type as Loans of the same Type, at any time or
from time to time, provided that: (i) the Company shall give the Administrative
Agent notice of each such prepayment, Conversion or Continuation as provided in
Section 4.05 hereof (and, upon the date specified in any such notice of
prepayment, the amount to be prepaid shall become due and payable hereunder),
which notice shall, in the case of each Conversion or Continuation, be
accompanied by the certificate specified in said Section 4.05; and (ii) any
prepayment of or Conversion of any Eurodollar Loan on a day other than the last
day of an Interest Period for such Loan shall be subject to Section 5.05 hereof.
Notwithstanding the foregoing, and without limiting the rights and remedies of
the Lenders under Section 9 hereof, in the event that any Event of Default shall
have occurred and be continuing, the Administrative Agent may (and at the
request of the Majority Lenders shall) suspend the right of the Company to
Convert any Loan into a Eurodollar Loan, or to Continue any Loan as a Eurodollar
Loan, in which event all Loans shall be Converted (on the last day(s) of the
respective Interest Periods therefor) or Continued, as the case may be, as Base
Rate Loans.
(b) In the event that (i) on the date of any borrowing,
Conversion or Continuation (after giving effect thereto) or on any Base Rate
Continuation Date the Aggregate Projected Loan Amount determined as of such date
shall exceed the Maximum Available Loan Amount and (ii) such Aggregate Projected
Loan Amount shall not be reduced to or below the Maximum Available Loan Amount
within three Business Days after such date, the Company shall immediately prepay
in full all of the Loans, together with accrued interest thereon and all other
Senior Guaranteed Credit Agreement
<PAGE> 23
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amounts payable by the Company hereunder and the Commitments shall automatically
be terminated. If at any time the Administrative Agent shall have actual
knowledge that the Aggregate Projected Loan Amount at such time exceeds the
Maximum Available Loan Amount, the Administrative Agent shall promptly give the
Company notice thereof (provided that the Administrative Agent shall not be
required to ascertain or inquire as to whether the Aggregate Projected Loan
Amount at any time exceeds the Maximum Available Loan Amount and shall have no
liability whatsoever to the Company, Motorola or any Lender if the Aggregate
Projected Loan Amount exceeds the Maximum Available Loan Amount).
Section 3. Payments of Principal and Interest.
3.01 Repayment of Loans.
(a) The Company hereby promises to pay to the Administrative
Agent for account of each Revolving Lender the entire outstanding principal
amount of such Lender's Revolving Loans, and each Revolving Loan shall mature,
on the Revolving Commitment Termination Date.
(b) The Company hereby promises to pay to the Administrative
Agent for account of each Term Lender the entire outstanding principal amount of
such Lender's Term Loans, and each Term Loan shall mature, on the Term Loan
Maturity Date.
3.02 Interest. The Company hereby promises to pay to the
Administrative Agent for account of each Lender interest on the unpaid principal
amount of each Loan made by such Lender for the period from and including the
date of such Loan to but excluding the date such Loan shall be paid in full, at
the following rates per annum:
(a) during such periods as such Loan is a Base Rate Loan, the
Base Rate (as in effect from time to time); and
(b) during such periods as such Loan is a Eurodollar Loan, for
each Interest Period relating thereto, the Eurodollar Rate for such Loan
for such Interest Period plus the Applicable Margin.
Notwithstanding the foregoing, the Company hereby promises to pay to the
Administrative Agent for account of each Lender interest at the applicable
Post-Default Rate on any principal of any Loan made by such Lender and on any
other amount payable by the Company hereunder to or for account of such Lender,
that shall not be paid in full when due (whether at stated maturity, by
acceleration or otherwise), for the period from and including the due date
thereof to but excluding the date the same is paid in full. Accrued interest on
each Loan shall be payable (i) in the case of a Base Rate Loan, quarterly on the
Quarterly Dates, (ii) in the case of a Eurodollar Loan, on the last day of each
Interest Period therefor and, if such Interest Period is longer than three
months, at three-month intervals following the first day of such Interest
Period, and (iii) in the case of any Loan, upon the payment or prepayment
thereof or the Conversion of such Loan to a Loan of another Type (but only on
the principal amount so paid, prepaid or Converted), except that interest
payable at the Post-Default Rate on any past due amount shall be payable from
time to time on demand. Promptly after the determination of any interest rate
provided for herein or
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<PAGE> 24
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any change therein, the Administrative Agent shall give notice thereof to the
Lenders to which such interest is payable and to the Company.
Section 4. Payments; Pro Rata Treatment; Computations; Etc.
4.01 Payments.
(a) Except to the extent otherwise provided herein, all payments
of principal, interest and other amounts to be made by the Company under this
Agreement shall be made to the Administrative Agent at an account in New York,
New York specified by the Administrative Agent in Dollars, in immediately
available funds, without deduction, set-off or counterclaim, not later than 1:00
p.m. New York time on the date on which such payment shall become due (each such
payment made after such time on such due date to be deemed to have been made on
the next succeeding Business Day).
(b) Any Lender for whose account any such payment is to be made
may (but shall not be obligated to) debit the amount of any such payment that is
not made by such time to any ordinary deposit account of the Company with such
Lender (with notice to the Company and the Administrative Agent).
(c) The Company shall, at the time of making each payment under
this Agreement for account of any Lender, specify to the Administrative Agent
(which shall so notify the intended recipient(s) thereof) the Loans or other
amounts payable by the Company hereunder to which such payment is to be applied
(and in the event that the Company fails to so specify, or if an Event of
Default has occurred and is continuing, the Administrative Agent may distribute
such payment to the Lenders for application in such manner as it or the Majority
Lenders, subject to Section 4.02 hereof, may determine to be appropriate).
(d) Each payment received by the Administrative Agent under this
Agreement for account of any Lender shall be paid by the Administrative Agent
promptly to such Lender, in immediately available funds, for account of such
Lender's Applicable Lending Office for the Loan or other obligation in respect
of which such payment is made.
(e) If the due date of any payment under this Agreement would
otherwise fall on a day that is not a Business Day, such date shall be extended
to the next succeeding Business Day, and interest shall be payable for any
principal so extended for the period of such extension.
4.02 Pro Rata Treatment. Except to the extent otherwise
provided herein: (a) each borrowing of Loans of a particular Class from the
Lenders under Section 2.01 hereof shall be made from the relevant Lenders, each
payment of commitment fee under Section 2.04 hereof in respect of Commitments
of a particular Class shall be made for account of the relevant Lenders, and
each termination or reduction of the amount of the Commitments of a particular
Class under Section 2.03 hereof shall be applied to the respective Commitments
of such Class of the relevant Lenders, pro rata according to the amounts of
their respective Commitments of such Class; (b) except as otherwise provided in
Section 5.04 hereof, Eurodollar Loans of a particular Class having the same
Interest Period shall be allocated pro rata among the relevant Lenders
according to the amounts of their respective Commitments of such Class (in the
case of the
Senior Guaranteed Credit Agreement
<PAGE> 25
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making of Loans of such Class) or their respective Loans of such Class (in the
case of Conversions and Continuations of Loans of such Class); (c) each payment
or prepayment of principal of Loans of a particular Class by the Company shall
be made for account of the relevant Lenders pro rata in accordance with the
respective unpaid principal amounts of the Loans of such Class held by them; and
(d) each payment of interest on Loans of a particular Class by the Company shall
be made for account of the relevant Lenders pro rata in accordance with the
amounts of interest on such Loans then due and payable to the respective
Lenders.
4.03 Computations. Interest on Eurodollar Loans and commitment
fees shall be computed on the basis of a year of 360 days and actual days
elapsed (including the first day but excluding the last day) occurring in the
period for which payable and interest on Base Rate Loans shall be computed on
the basis of a year of 365 or 366 days, as the case may be, and actual days
elapsed (including the first day but excluding the last day) occurring in the
period for which payable. Notwithstanding the foregoing, for each day that the
Base Rate is calculated by reference to the Federal Funds Rate, interest on Base
Rate Loans shall be computed on the basis of a year of 360 days and actual days
elapsed.
4.04 Minimum Amounts. Except for Conversions or prepayments made
pursuant to Section 5.04 hereof, each borrowing, Conversion, Continuation and
partial prepayment of principal of Loans shall be in an aggregate amount at
least equal to $10,000,000 or a larger multiple of $1,000,000 (borrowings,
Conversions, Continuations or prepayments of or into Loans of different Types
or, in the case of Eurodollar Loans, having different Interest Periods at the
same time hereunder to be deemed separate borrowings, Conversions, Conversions
and prepayments for purposes of the foregoing, one for each Type or Interest
Period), provided that the aggregate principal amount of Eurodollar Loans of a
particular Class having the same Interest Period shall be in an amount at least
equal to $10,000,000 or a larger multiple of $1,000,000 and, if any Eurodollar
Loans would otherwise be in a lesser principal amount for any period, such Loans
shall be Base Rate Loans during such period.
4.05 Certain Notices. Notices by the Company to the
Administrative Agent of terminations or reductions of the Commitments and of
borrowings, Conversions, Continuations and optional prepayments of Loans and of
Classes and of Types of Loans and of the duration of Interest Periods shall be
irrevocable and shall be effective only if received by the Administrative Agent
not later than 10:00 a.m. New York time on the number of Business Days prior to
the date of the relevant termination, reduction, borrowing, Conversion,
Continuation or prepayment or the first day of such Interest Period specified
below:
<TABLE>
<CAPTION>
Number of Business
Notice Days Prior
------ ------------------
<S> <C> <C>
Termination or reduction of 3
Commitments
Borrowing or prepayment of, or
Conversions into, Base Rate Loans same day
</TABLE>
Senior Guaranteed Credit Agreement
<PAGE> 26
- 22 -
<TABLE>
<S> <C> <C>
Borrowing or prepayment of, 3
Conversions into, Continuations as,
or duration of Interest Period for,
Eurodollar Loans
</TABLE>
Each such notice of termination or reduction shall specify the amount and the
Class of the Commitments to be terminated or reduced. Each such notice of
borrowing, Conversion, Continuation or optional prepayment shall specify the
Class of Loans to be borrowed, Converted, Continued or prepaid and the amount
(subject to Section 4.04 hereof) and Type of each Loan to be borrowed,
Converted, Continued or prepaid and the date of borrowing, Conversion,
Continuation or optional prepayment (which shall be a Business Day), and each
such notice of borrowing, Conversion or Continuation, as the case may be, shall
be accompanied by a certificate of the Company setting forth in reasonable
detail the calculation of the Aggregate Projected Loan Amount as of the date of
such borrowing, Conversion or Continuation, as the case may be. Each such notice
of the duration of an Interest Period shall specify the Loans to which such
Interest Period is to relate. The Administrative Agent shall promptly notify the
Lenders of the contents of each notice referred to in this Section 4.05. In the
event that the Company fails to select the Type of Loan, or the duration of any
Interest Period for any Eurodollar Loan, within the time period and otherwise as
provided in this Section 4.05, such Loan (if outstanding as a Eurodollar Loan)
will be automatically Converted into a Base Rate Loan on the last day of the
then current Interest Period for such Loan or (if outstanding as a Base Rate
Loan) will remain as, or (if not then outstanding) will be made as, a Base Rate
Loan. In addition, not later than 10:00 a.m. New York time on each Base Rate
Continuation Date the Company shall deliver to the Administrative Agent a
certificate of the Company setting forth in reasonable detail the calculation of
the Aggregate Projected Loan Amount as of such date.
4.06 Non-Receipt of Funds by the Administrative Agent. Unless the
Administrative Agent shall have been notified by a Lender or the Company (the
"Payor") prior to the date on which the Payor is to make payment to the
Administrative Agent of (in the case of a Lender) the proceeds of a Loan to be
made by such Lender hereunder or (in the case of the Company) a payment to the
Administrative Agent for account of one or more of the Lenders hereunder (such
payment being herein called the "Required Payment"), which notice shall be
effective upon receipt, that the Payor does not intend to make the Required
Payment to the Administrative Agent, the Administrative Agent may assume that
the Required Payment has been made and may, in reliance upon such assumption
(but shall not be required to), make the amount thereof available to the
intended recipient(s) on such date; and, if the Payor has not in fact made the
Required Payment to the Administrative Agent, the recipient(s) of such payment
shall, on demand, repay to the Administrative Agent the amount so made available
together with interest thereon in respect of each day during the period
commencing on the date (the "Advance Date") such amount was so made available by
the Administrative Agent until the date the Administrative Agent recovers such
amount at a rate per annum equal to the Federal Funds Rate for such day and, if
such recipient(s) shall fail promptly to make such payment, the Administrative
Agent shall be entitled to recover such amount, on demand, from the Payor,
together with interest as aforesaid, provided that if neither the recipient(s)
nor the Payor shall return the Required Payment to the Administrative Agent
within three Business Days of the
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<PAGE> 27
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Advance Date, then, retroactively to the Advance Date, the Payor and the
recipient(s) shall each be obligated to pay interest on the Required Payment as
follows:
(i) if the Required Payment shall represent a payment to be made
by the Company to the Lenders, the Company and the recipient(s) shall
each be obligated retroactively to the Advance Date to pay interest in
respect of the Required Payment at the Post-Default Rate (without
duplication of the obligation of the Company under Section 3.02 hereof
to pay interest on the Required Payment at the Post-Default Rate), it
being understood that the return by the recipient(s) of the Required
Payment to the Administrative Agent shall not limit such obligation of
the Company under said Section 3.02 to pay interest at the Post-Default
Rate in respect of the Required Payment; and
(ii) if the Required Payment shall represent proceeds of a Loan
to be made by a Lender to the Company, the Payor and the Company shall
each be obligated retroactively to the Advance Date to pay interest in
respect of the Required Payment pursuant to whichever of the rates
specified in Section 3.02 hereof is applicable to the Type of such Loan,
it being understood that the return by the Company of the Required
Payment to the Administrative Agent shall not limit any claim the
Company may have against the Payor in respect of such Required Payment.
4.07 Sharing of Payments, Etc.
(a) The Company agrees that, in addition to (and without
limitation of) any right of set-off, banker's lien or counterclaim a Lender may
otherwise have, each Lender shall be entitled, at its option (to the fullest
extent permitted by law), to set off and apply any deposit (general or special,
time or demand, provisional or final), or other indebtedness, held by it for the
credit or account of the Company at any of its offices, in Dollars or in any
other currency, against any principal of or interest on any of such Lender's
Loans or any other amount payable to such Lender hereunder, that is not paid
when due (regardless of whether such deposit or other indebtedness is then due
to the Company), in which case it shall promptly notify the Company and the
Administrative Agent thereof, provided that such Lender's failure to give such
notice shall not affect the validity thereof.
(b) If any Lender shall obtain from the Company payment of any
principal of or interest on any Loan owing to it or payment of any other amount
under this Agreement or any other Credit Document through the exercise of any
right of set-off, banker's lien or counterclaim or similar right or otherwise
(other than from the Administrative Agent as provided herein), and, as a result
of such payment, such Lender shall have received a greater percentage of the
principal of or interest on the Loans or such other amounts then due hereunder
or thereunder by the Company to such Lender than the percentage received by any
other relevant Lender, it shall promptly purchase from such other Lenders
participations in (or, if and to the extent specified by such Lender, direct
interests in) the Loans or such other amounts, respectively, owing to such other
Lenders (or in interest due thereon, as the case may be) in such amounts, and
make such other adjustments from time to time as shall be equitable, to the end
that all the Lenders shall share the benefit of such excess payment (net of any
expenses that may be incurred by such Lender in obtaining or preserving such
excess payment) pro rata in accordance with the unpaid
Senior Guaranteed Credit Agreement
<PAGE> 28
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principal of and/or interest on the Loans or such other amounts, respectively,
owing to each of the Lenders. To such end all the Lenders shall make appropriate
adjustments among themselves (by the resale of participations sold or otherwise)
if such payment is rescinded or must otherwise be restored.
(c) The Company agrees that any Lender so purchasing such a
participation (or direct interest) may exercise all rights of set-off, banker's
lien, counterclaim or similar rights with respect to such participation as fully
as if such Lender were a direct holder of Loans or other amounts (as the case
may be) owing to such Lender in the amount of such participation (and the
Company's obligations will be reduced accordingly).
(d) Nothing contained herein shall require any Lender to exercise
any such right or shall affect the right of any Lender to exercise, and retain
the benefits of exercising, any such right with respect to any other
indebtedness or obligation of the Company. If, under any applicable bankruptcy,
insolvency or other similar law, any Lender receives a secured claim in lieu of
a set-off to which this Section 4.07 applies, such Lender shall, to the extent
practicable, exercise its rights in respect of such secured claim in a manner
consistent with the rights of the Lenders entitled under this Section 4.07 to
share in the benefits of any recovery on such secured claim.
Section 5. Yield Protection, Etc.
5.01 Additional Costs.
(a) The Company shall pay directly to each Lender from time to
time such amounts as such Lender may determine to be necessary to compensate
such Lender for any costs that such Lender determines are attributable to its
making or maintaining of any Eurodollar Loans or its obligation to make any
Eurodollar Loans hereunder, or any reduction in any amount receivable by such
Lender hereunder in respect of any of such Loans or such obligation, resulting
from any Regulatory Change that:
(i) shall subject any Lender (or its Applicable Lending Office
for any of such Loans) to any tax, duty or other charge in respect of
such Loans or change the basis of taxation of any amounts payable to
such Lender under this Agreement in respect of any of such Loans
(excluding changes in the taxation of the overall net income of such
Lender or of such Applicable Lending Office by the jurisdiction in which
such Lender has its principal office or such Applicable Lending Office),
provided that this Section 5.01(a)(i) shall not apply to any amounts
excluded pursuant to the proviso to Section 5.06(a) hereof; or
(ii) imposes or modifies any reserve, special deposit or similar
requirements (other than the Reserve Requirement utilized in the
determination of the Eurodollar Rate for such Loan) relating to any
extensions of credit or other assets of, or any deposits with or other
liabilities of, such Lender (including, without limitation, any of such
Loans or any deposits referred to in the definition of "Eurodollar Base
Rate" in Section 1.01 hereof), or any commitment of such Lender
(including, without limitation, the Commitment of such Lender
hereunder); or
Senior Guaranteed Credit Agreement
<PAGE> 29
- 25 -
(iii) imposes any other condition affecting this Agreement (or
any of such extensions of credit or liabilities) or its Commitment.
If any Lender requests compensation from the Company under this Section 5.01(a),
the Company may, by notice to such Lender (with a copy to the Administrative
Agent), suspend the obligation of such Lender thereafter to make or Continue
Eurodollar Loans, or to Convert Base Rate Loans into Eurodollar Loans, until the
Regulatory Change giving rise to such request ceases to be in effect (in which
case the provisions of Section 5.04 hereof shall be applicable), provided that
such suspension shall not affect the right of such Lender to receive the
compensation so requested.
(b) Without limiting the effect of the foregoing provisions of
this Section 5.01 (but without duplication), the Company shall pay directly to
each Lender from time to time on request such amounts as such Lender may
determine to be necessary to compensate such Lender (or, without duplication,
the bank holding company of which such Lender is a subsidiary) for any costs
that it determines are attributable to the maintenance by such Lender (or any
Applicable Lending Office or such bank holding company), pursuant to any law or
regulation or any interpretation, directive or request (whether or not having
the force of law and whether or not failure to comply therewith would be
unlawful) of any court or Governmental Authority (i) following any Regulatory
Change or (ii) implementing any risk-based capital guideline or other
requirement (whether or not having the force of law and whether or not the
failure to comply therewith would be unlawful) hereafter issued by any
Governmental Authority implementing at the national level the Basle Accord, of
capital in respect of its Commitment or Loans (such compensation to include,
without limitation, an amount equal to any reduction of the rate of return on
assets or equity of such Lender (or any Applicable Lending Office or such bank
holding company) to a level below that which such Lender (or any Applicable
Lending Office or such bank holding company) could have achieved but for such
law, regulation, interpretation, directive or request).
(c) Each Lender shall notify the Company of any event occurring
after the date hereof entitling such Lender to compensation under paragraph (a)
or (b) of this Section 5.01 as promptly as practicable, but in any event within
45 days, after such Lender obtains actual knowledge thereof; provided that (i)
if any Lender fails to give such notice within 45 days after it obtains actual
knowledge of such an event, such Lender shall, with respect to compensation
payable pursuant to this Section 5.01 in respect of any costs resulting from
such event, only be entitled to payment under this Section 5.01 for costs
incurred from and after the date 45 days prior to the date that such Lender does
give such notice and (ii) each Lender will designate a different Applicable
Lending Office for the Loans of such Lender affected by such event if such
designation will avoid the need for, or reduce the amount of, such compensation
and will not, in the sole opinion of such Lender, be disadvantageous to such
Lender, except that such Lender shall have no obligation to designate an
Applicable Lending Office located in the United States of America. Each Lender
will furnish to the Company a certificate setting forth the basis and amount of
each request by such Lender for compensation under paragraph (a) or (b) of this
Section 5.01. Determinations and allocations by any Lender for purposes of this
Section 5.01 of the effect of any Regulatory Change pursuant to paragraph (a) of
this Section 5.01, or of the effect of capital maintained pursuant to paragraph
(b) of this Section 5.01, on its costs or rate of return of maintaining Loans or
its obligation to make Loans, or on amounts receivable by it in
Senior Guaranteed Credit Agreement
<PAGE> 30
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respect of Loans, and of the amounts required to compensate such Lender under
this Section 5.01, shall be conclusive, provided that such determinations and
allocations are made on a reasonable basis.
5.02 Limitation on Types of Loans. Anything herein to the
contrary notwithstanding, if, on or prior to the determination of any Eurodollar
Base Rate for any Interest Period:
(a) the Administrative Agent determines, which determination
shall be conclusive, that quotations of interest rates for the relevant
deposits referred to in the definition of "Eurodollar Base Rate" in
Section 1.01 hereof are not being provided in the relevant amounts or
for the relevant maturities for purposes of determining rates of
interest for Eurodollar Loans as provided herein; or
(b) if the related Loans are Revolving Loans, the Majority
Revolving Lenders or, if the related Loans are Term Loans, the Majority
Term Lenders determine, which determination shall be conclusive, and
notify the Administrative Agent that the relevant rates of interest
referred to in the definition of "Eurodollar Base Rate" in Section 1.01
hereof upon the basis of which the rate of interest for Eurodollar Loans
for such Interest Period is to be determined are not likely adequately
to cover the cost to such Lenders of making or maintaining Eurodollar
Loans for such Interest Period;
then the Administrative Agent shall give the Company and each Lender prompt
notice thereof and, so long as such condition remains in effect, the Lenders
shall be under no obligation to make additional Eurodollar Loans, to Continue
Eurodollar Loans or to Convert Base Rate Loans into Eurodollar Loans, and the
Company shall, on the last day(s) of the then current Interest Period(s) for the
outstanding Eurodollar Loans, either prepay such Loans or Convert such Loans
into Base Rate Loans in accordance with Section 2.08 hereof.
5.03 Illegality. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Lender or its
Applicable Lending Office to honor its obligation to make or maintain Eurodollar
Loans hereunder (and, in the sole opinion of such Lender, the designation of a
different Applicable Lending Office would either not avoid such unlawfulness or
would be disadvantageous to such Lender), then such Lender shall promptly notify
the Company thereof (with a copy to the Administrative Agent) and such Lender's
obligation to make or Continue, or to Convert Loans of any other Type into,
Eurodollar Loans shall be suspended until such time as such Lender may again
make and maintain Eurodollar Loans (in which case the provisions of Section 5.04
hereof shall be applicable).
5.04 Treatment of Affected Loans. If the obligation of any Lender
to make Eurodollar Loans or to Continue, or to Convert Base Rate Loans into,
Eurodollar Loans shall be suspended pursuant to Section 5.01 or 5.03 hereof,
such Lender's Eurodollar Loans shall be automatically Converted into Base Rate
Loans on the last day(s) of the then current Interest Period(s) for Eurodollar
Loans (or, in the case of a Conversion resulting from a circumstance described
in Section 5.03 hereof, on such earlier date as such Lender may specify to the
Company with a copy to the Administrative Agent) and, unless and until such
Lender gives
Senior Guaranteed Credit Agreement
<PAGE> 31
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notice as provided below that the circumstances specified in Section 5.01 or
5.03 hereof that gave rise to such Conversion no longer exist:
(a) to the extent that such Lender's Eurodollar Loans have been
so Converted, all payments and prepayments of principal that would
otherwise be applied to such Lender's Eurodollar Loans shall be applied
instead to its Base Rate Loans; and
(b) all Loans that would otherwise be made or Continued by such
Lender as Eurodollar Loans shall be made or Continued instead as Base
Rate Loans, and all Base Rate Loans of such Lender that would otherwise
be Converted into Eurodollar Loans shall remain as Base Rate Loans.
If such Lender gives notice to the Company with a copy to the
Administrative Agent that the circumstances specified in Section 5.01 or 5.03
hereof that gave rise to the Conversion of such Lender's Eurodollar Loans
pursuant to this Section 5.04 no longer exist (which such Lender agrees to do
promptly upon such circumstances ceasing to exist) at a time when Eurodollar
Loans made by other Lenders are outstanding, such Lender's Base Rate Loans shall
be automatically Converted, on the first day(s) of the next succeeding Interest
Period(s) for such outstanding Eurodollar Loans, to the extent necessary so
that, after giving effect thereto, all Base Rate and Eurodollar Loans are
allocated among the Lenders ratably (as to principal amounts, Types and Interest
Periods) in accordance with their respective Commitments.
5.05 Compensation. The Company shall pay to the Administrative
Agent for account of each Lender, upon the request of such Lender through the
Administrative Agent, such amount or amounts as shall be sufficient (in the
reasonable opinion of such Lender) to compensate it for any loss (other than
lost profit), cost or expense that such Lender reasonably determines is
attributable to:
(a) any payment, prepayment or Conversion of a Eurodollar Loan
made by such Lender for any reason (including, without limitation, the
acceleration of the Loans pursuant to Section 9 hereof) on a date other
than the last day of the Interest Period for such Loan; or
(b) any failure by the Company for any reason (including, without
limitation, the failure of any of the conditions precedent specified in
Section 6 hereof to be satisfied) to borrow a Eurodollar Loan from such
Lender on the date for such borrowing specified in the relevant notice
of borrowing given pursuant to Section 2.02 hereof, or any failure to
prepay, Convert or Continue any Eurodollar Loan on the date specified in
any notice delivered hereunder.
Without limiting the effect of the preceding sentence, such compensation shall
include an amount equal to the excess, if any, of (i) the amount of interest
that otherwise would have accrued on the principal amount so paid, prepaid,
Converted or not borrowed for the period from the date of such payment,
prepayment, Conversion or failure to borrow to the last day of the then current
Interest Period for such Loan (or, in the case of a failure to borrow, the
Interest Period for such Loan that would have commenced on the date specified
for such borrowing) at the applicable rate of interest for such Loan provided
for herein (but excluding the Applicable
Senior Guaranteed Credit Agreement
<PAGE> 32
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Margin, if any) over (ii) the amount of interest that otherwise would have
accrued on such principal amount at a rate per annum equal to the interest
component of the amount such Lender would have bid in the London interbank
market for Dollar deposits of leading banks in amounts comparable to such
principal amount and with maturities comparable to such period (as reasonably
determined by such Lender), or if such Lender shall cease to make such bids, the
equivalent rate, as reasonably determined by such Lender, appearing on Page 3750
of the Telerate Service (or on any successor or substitute page of such Service,
or any successor to or substitute for such Service, providing rate quotations
comparable to those currently provided on such page of such Service).
5.06 U.S. Taxes.
(a) The Company agrees to pay to each Lender that is not a U.S.
Person such additional amounts as are necessary in order that the net payment of
any amount due to such non-U.S. Person hereunder after deduction for or
withholding in respect of any U.S. Taxes imposed with respect to such payment
(or in lieu thereof, payment of such U.S. Taxes by such non-U.S. Person), will
not be less than the amount stated herein to be then due and payable, provided
that the foregoing obligation to pay such additional amounts shall not apply:
(i) to any payment to any Lender hereunder unless such Lender is,
on the date hereof (or on the date it becomes a Lender hereunder as
provided in Section 11.06(b) hereof) and on the date of any change in
the Applicable Lending Office of such Lender, either (x) entitled to
submit either a Form 1001 (relating to such Lender and entitling it to a
complete exemption from withholding on all interest to be received by it
hereunder in respect of the Loans) or Form 4224 (relating to all
interest to be received by such Lender hereunder in respect of the
Loans) or (y) in the case of a Lender not treated as a bank for
regulatory, tax or other legal purposes in any jurisdiction that is not
(1) a shareholder of the Company or a controlled foreign corporation
related to the Company for purposes of section 881(c)(3) of the U.S. Tax
Code or (2) a conduit entity within the meaning of United States
Treasury Regulations section 1.881-3, entitled to submit a Form W-8
(relating to such Lender and entitling it to an exemption from United
States backup withholding tax); or
(ii) to any U.S. Taxes to the extent imposed by reason of the
failure by such non-U.S. Person to comply with applicable certification,
information, documentation or other reporting requirements concerning
the nationality, residence, identity or connections with the United
States of America of such non-U.S. Person if such compliance is required
by statute or regulation of the United States of America as a
precondition to reduction of or relief or exemption from such U.S.
Taxes.
For the purposes of this Section 5.06(a), (A) "U.S. Person" shall mean a
citizen, national or resident of the United States of America, a corporation,
partnership or other entity created or organized in or under any laws of the
United States of America or any State thereof, or any estate or trust that is
subject to U.S. Federal income taxation regardless of the source of its income,
(B) "U.S. Taxes" shall mean any present or future tax, assessment or other
charge or levy imposed by or on behalf of the United States of America or any
taxing authority thereof or therein, other than Excluded Taxes, (C) "Form 1001"
shall mean Form 1001 (Ownership,
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Exemption, or Reduced Rate Certificate) of the Department of the Treasury of the
United States of America, (D) "Form 4224" shall mean Form 4224 (Exemption from
Withholding of Tax on Income Effectively Connected with the Conduct of a Trade
or Business in the United States) of the Department of the Treasury of the
United States of America (or in relation to either such Form such successor and
related forms as may from time to time be adopted by the relevant taxing
authorities of the United States of America to document a claim to which such
Form relates), (E) "Form W-8" shall mean Internal Revenue Service Form W-8 and
(F) "Excluded Taxes" shall mean, with respect to the Administrative Agent, any
Lender or any other recipient of any payment to be made by or on account of any
obligation of the Company hereunder, (a) income or franchise taxes imposed on
(or measured by) its net income or (b) any branch profits taxes. Each of the
Forms referred to in the foregoing clauses (C), (D) and (E) shall include such
successor and related forms as may from time to time be adopted by the relevant
taxing authorities of the United States of America to document a claim to which
such Form relates.
(b) Within 30 days after paying any amount to the Administrative
Agent or any Lender from which it is required by law to make any deduction or
withholding, and within 30 days after it is required by law to remit such
deduction or withholding to any relevant taxing or other authority, the Company
shall deliver to the Administrative Agent for delivery to such non-U.S. Person
evidence satisfactory to such Person of such deduction, withholding or payment
(as the case may be).
5.07 Replacement of Lenders. If any Lender requests compensation
pursuant to Section 5.01 or 5.06 hereof, or any Lender's obligation to make or
Continue, or to Convert Loans of any Class and of any Type into, the other Type
of Loan of such Class shall be suspended pursuant to Section 5.01 or 5.03 hereof
(any such Lender requesting such compensation, or whose obligations are so
suspended, being herein called a "Requesting Lender"), the Company, upon three
Business Days' notice, may, at its sole expense, require that such Requesting
Lender transfer all of its right, title and interest under this Agreement to any
bank or other financial institution (a "Proposed Lender") identified by the
Company that is satisfactory to the Administrative Agent (i) if such Proposed
Lender agrees to assume all of the obligations of such Requesting Lender
hereunder, and to purchase all of such Requesting Lender's Loans hereunder for
consideration equal to the aggregate outstanding principal amount of such
Requesting Lender's Loans, together with interest accrued thereon to the date of
such purchase, and satisfactory arrangements are made for payment to such
Requesting Lender of all other amounts payable hereunder to such Requesting
Lender on or prior to the date of such transfer (including any fees accrued
hereunder and any amounts that would be payable under Section 5 hereof as if all
of such Requesting Lender's Loans were being prepaid in full on such date) and
(ii) if such Requesting Lender has requested compensation pursuant to Section
5.01 or 5.06 hereof, such Proposed Lender's aggregate requested compensation, if
any, pursuant to said Section 5.01 or 5.06 with respect to such Requesting
Lender's Loans is lower than that of the Requesting Lender. Subject to the
provisions of Section 11.06(b) hereof, such Proposed Lender shall be a "Lender"
for all purposes hereunder. Without prejudice to the survival of any other
agreement of the Company hereunder the agreements of the Company contained in
Sections 5.01, 5.06 and 11.03 hereof (without duplication of any payments made
to such Requesting Lender by the Company or the Proposed Lender) shall survive
for the benefit of such Requesting Lender under this Section 5.07 with respect
to the time prior to such replacement.
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Section 6. Conditions Precedent.
6.01 Effectiveness. The effectiveness of this Agreement and the
obligation of each Lender to make its initial Loan or Loans in accordance with
Section 2.01 are subject to the conditions precedent that the Agents shall have
received on or before the Closing Date the following documents, each of which
shall be satisfactory to the Agents (and to the extent specified below, to the
Lenders) in form and substance:
(a) Charter Documents. Certified copies of the LLC Agreement and
of the certificate of incorporation and by-laws of Motorola, and of all
corporate or other authority for each Credit Party (including, without
limitation, board of directors resolutions and evidence of the
incumbency, including specimen signatures, of officers) with respect to
the execution, delivery and performance of such of the Credit Documents
to which each Credit Party is intended to be a party and each other
document to be delivered by such Credit Party from time to time in
connection herewith or therewith and the Loans hereunder (and each Agent
and each Lender may conclusively rely on such certificate until it
receives notice in writing from the respective Credit Party to the
contrary).
(b) Motorola Guarantee Agreement. The Motorola Guarantee
Agreement, duly executed and delivered by Motorola and the
Administrative Agent.
(c) Company Officer's Certificate. A certificate of a senior
officer of the Company, dated the Closing Date, to the effect that:
(i) no Company Default shall have occurred and be
continuing; and
(ii) the representations and warranties made by the
Company in Section 7 hereof shall be true and complete on and as
of the Closing Date with the same force and effect as if made on
and as of such date (or, if any such representation or warranty
is expressly stated to have been made as of a specific date, as
of such specific date).
(d) Motorola Officer's Certificate. A certificate of a senior
officer of Motorola, dated the Closing Date, to the effect that:
(i) no Motorola Default shall have occurred and be
continuing; and
(ii) the representations and warranties made by Motorola
in Section 3 of the Motorola Guarantee Agreement shall be true
and complete on and as of the Closing Date with the same force
and effect as if made on and as of such date (or, if any such
representation or warranty is expressly stated to have been made
as of a specific date, as of such specific date).
(e) Opinion of Counsel to the Company. An opinion, dated the
Closing Date, of Sullivan & Cromwell, counsel to the Company,
substantially in the form of Exhibit B hereto and covering such other
matters as any Agent or any Lender may reasonably
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request (and the Company hereby instructs such counsel to deliver such
opinion to the Lenders and the Agents).
(f) Opinions of Counsel to Motorola. (i) An opinion, dated the
Closing Date, of in-house counsel to Motorola and (ii) an opinion, dated
the Closing Date, of Kirkland & Ellis, special New York counsel to
Motorola, substantially in the forms of Exhibits C-1 and C-2 hereto,
respectively, and covering such other matters as any Agent or any Lender
may reasonably request (and Motorola hereby instructs such counsel to
deliver such opinions to the Lenders and the Agents).
(g) Opinion of Special New York Counsel to Global Lead Arrangers
and the Agents. An opinion, dated the Closing Date, of Milbank, Tweed,
Hadley & McCloy, special New York counsel to the Global Lead Arrangers
and the Agents, substantially in the form of Exhibit D hereto (and the
Global Lead Arrangers and the Agents hereby instruct such counsel to
deliver such opinion to the Lenders and the Agents).
(h) Repayment of Existing Guaranteed Credit Agreement. Evidence
that the principal of and interest on all loans outstanding under, and
all other amounts owing under or in respect of, the Existing Guaranteed
Credit Agreement shall have been (or shall be simultaneously) paid in
full, and the commitments thereunder shall have been terminated.
(i) Other Documents. Such other documents as any Agent or any
Lender or special New York counsel to the Global Lead Arrangers may
reasonably request.
The effectiveness of this Agreement is also subject to the payment by the
Company of such fees and expenses as the Company shall have agreed to pay or
deliver to the Global Lead Arrangers, any Lender and/or any Agent in connection
herewith, including, without limitation, the reasonable fees and expenses of
Milbank, Tweed, Hadley & McCloy, special New York counsel to the Global Lead
Arrangers and the Agents, in connection with the negotiation, preparation,
execution and delivery of this Agreement and the other Credit Documents and the
making of the Loans hereunder (to the extent that statements for such fees and
expenses have been delivered to the Company).
6.02 Initial Loans. The obligation of each Lender to make its
initial Loan or Loans to the Company on the Closing Date is subject to the
further conditions precedent that, both immediately prior to the making of such
Loan and also after giving effect thereto and to the intended use thereof:
(a) no Company Default shall have occurred and be continuing;
(b) the representations and warranties made by the Company in
Section 7 hereof shall be true and complete on and as of the date of the
making of such Loan with the same force and effect as if made on and as
of such date (or, if any such representation or warranty is expressly
stated to have been made as of a specific date, as of such specific
date);
(c) no Motorola Default shall have occurred and be continuing;
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(d) the representations and warranties made by Motorola in
Section 3 of the Motorola Guarantee Agreement shall be true and complete
on and as of the date of the making of such Loan with the same force and
effect as if made on and as of such date (or, if any such representation
or warranty is expressly stated to have been made as of a specific date,
as of such specific date); and
(e) the Aggregate Projected Loan Amount, determined as of such
borrowing date (after giving effect to such borrowing), shall not exceed
the Maximum Available Loan Amount.
6.03 Certain Revolving Loans. The obligation of each Revolving
Lender to make its Revolving Loans after the Closing Date is subject to the
conditions precedent that, both immediately prior to the making of each such
Revolving Loan and also after giving effect thereto and to the intended use
thereof:
(a) no Event of Default under clauses (a), (g) or (h) of Section
9 hereof with respect to the Company or any Subsidiary of the Company
shall have occurred and be continuing;
(b) the representations and warranties made by the Company in
Sections 7.01 (with respect to the valid existence and requisite power
of the Company only), 7.04, 7.05, 7.06 and 7.07 hereof shall be true and
complete on and as of the date of the making of such Loan with the same
force and effect as if made on and as of such date;
(c) no Motorola Default shall have occurred and be continuing;
(d) the representations and warranties made by Motorola in
Section 3 of the Motorola Guarantee Agreement shall be true and complete
on and as of the date of the making of such Loan with the same force and
effect as if made on and as of such date (or, if any such representation
or warranty is expressly stated to have been made as of a specific date,
as of such specific date); and
(e) the Aggregate Projected Loan Amount, determined as of such
borrowing date (after giving effect to such borrowing), shall not exceed
the Maximum Available Loan Amount.
Each notice of borrowing by the Company hereunder shall constitute a
certification (i) by the Company to the effect set forth in clauses (a), (b) and
(e) above and (ii) by Motorola to the effect set forth in clauses (c) and (d)
above (in each case, both as of the date of such notice and, unless the Company
or Motorola, respectively, otherwise notifies the Administrative Agent prior to
the date of such borrowing, as of the date of such borrowing).
Section 7. Representations and Warranties. The Company represents
and warrants to the Agents and the Lenders that:
7.01 Legal Existence. Each of the Company and its Subsidiaries:
(a) is a limited liability company, corporation, partnership or other entity
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization; (b) has all requisite corporate
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or other power, and has all material Governmental Approvals necessary, to own
its assets and carry on its business as now being or as proposed to be conducted
with such exceptions as could not reasonably be expected (either individually or
in the aggregate) to result in a Material Adverse Effect; and (c) is qualified
to do business and is in good standing in all jurisdictions in which the nature
of the business conducted by it makes such qualification necessary and where
failure so to qualify could reasonably be expected (either individually or in
the aggregate) to result in a Material Adverse Effect.
7.02 Financial Condition. The Company has heretofore furnished to
each of the Lenders the consolidated balance sheet of the Company as at December
31, 1997 and the related statements of consolidated income, retained earnings
and cash flows of the Company for the fiscal year ended on said date, with the
opinion thereon of KPMG Peat Marwick LLP, and the unaudited consolidated balance
sheet of the Company as at September 30, 1998 and the related statements of
consolidated income, retained earnings and cash flows of the Company for the
nine-month period ended on such date. All such financial statements present
fairly, in all material respects, the financial condition of the Company and its
consolidated Subsidiaries, as at said dates and the results of its operations
for the fiscal year and nine-month period ended on said dates (subject, in the
case of such financial statements as at September 30, 1998, to normal year-end
audit adjustments), all in accordance with generally accepted accounting
principles and practices applied on a consistent basis. Since December 31, 1997,
except as disclosed in the Information Memorandum, there has been no material
adverse change in the financial condition, operations or business of the Company
and its Subsidiaries, taken as a whole, from that set forth in said financial
statements as at said date, except such as could not reasonably be expected
(either individually or in the aggregate) to result in a Material Adverse
Effect.
7.03 Litigation. Except as set forth in Schedule II hereto, there
are no legal or arbitral proceedings, or any proceedings by or before any
Governmental Authority, now pending or (to the knowledge of the Company)
threatened against the Company or any of its Subsidiaries that could reasonably
be expected (either individually or in the aggregate) to result in a Material
Adverse Effect.
7.04 No Breach. None of the execution and delivery of the Credit
Documents to which it is a party, the consummation of the transactions herein
and therein contemplated or compliance with the terms and provisions hereof and
thereof will conflict with or result in a breach of, or require any consent
(other than any consent which has been obtained and is in full force and effect)
under, the LLC Agreement, or any material provision of any applicable law or
regulation or any order, writ, injunction or decree of any court or Governmental
Authority, or any material agreement or instrument to which the Company or any
of its Subsidiaries is a party or by which any of them or any of their Property
is bound or to which any of them is subject, or constitute a default under any
such agreement or instrument, or result in the creation or imposition of any
Lien upon any Property of the Company or any of its Subsidiaries pursuant to the
terms of any such agreement or instrument (other than any Liens in favor of
Motorola).
7.05 Action. The Company has all necessary power, authority and
legal right to execute, deliver and perform its obligations under each of the
Credit Documents to which it is a party; the execution, delivery and performance
by the Company of each of the Credit Documents to which it is a party have been
duly authorized by all necessary action on its part (including,
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without limitation, any required member or shareholder approvals); and this
Agreement has been duly and validly executed and delivered by the Company and
constitutes its legal, valid and binding obligation, enforceable against the
Company in accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium or similar laws of general applicability affecting
the enforcement of creditors' rights.
7.06 Approvals. No authorizations, approvals or consents of, and
no filings or registrations with, any Governmental Authority, or any securities
exchange, are necessary for the execution, delivery or performance by the
Company of any of the Credit Documents to which it is a party or for the
legality, validity or enforceability hereof or thereof.
7.07 Use of Credit. Neither the Company nor any of its
Subsidiaries is engaged principally, or as one of its important activities, in
the business of extending credit for the purpose, whether immediate, incidental
or ultimate, of buying or carrying Margin Stock, and no part of the proceeds of
the Loans hereunder will be used to buy or carry any Margin Stock.
7.08 ERISA. Each Plan, and, to the knowledge of the Company, each
Multiemployer Plan, of the Company is in material compliance with, and has been
administered in material compliance with, the applicable provisions of ERISA,
the U.S. Tax Code and any other U.S. Federal or State law. No event or condition
has occurred and is continuing as to which the Company would be under an
obligation to furnish a report to the Administrative Agent under Section 8.01(d)
hereof (other than any event or condition as to which a report has been given).
7.09 Taxes. The Company and its Subsidiaries have filed all U.S.
Federal income tax returns and all other material tax returns and information
statements that are required to be filed by them and have paid all taxes due
pursuant to such returns or pursuant to any assessment received by the Company
or any of its Subsidiaries, except for any such tax being contested in good
faith and by proper proceedings and as to which adequate reserves have been set
aside by the Company in accordance with GAAP. The charges, accruals and reserves
on the books of the Company and its Subsidiaries in respect of taxes and other
governmental charges are, in the opinion of the Company, adequate.
7.10 Investment Company Act. Neither the Company nor any of its
Subsidiaries is an "investment company", or a company "controlled" by a company
registered as an "investment company", as such terms are defined in the
Investment Company Act of 1940, as amended.
7.11 Public Utility Holding Company Act. Neither the Company nor
any of its Subsidiaries is a "holding company", or an "affiliate" of a "holding
company" or a "subsidiary company" of a "holding company", within the meaning of
the Public Utility Holding Company Act of 1935, as amended.
7.12 Capitalization. The Company has heretofore delivered to the
Agents a true and complete copy of the LLC Agreement. The only member of the
Company on the date hereof is Iridium LLC. As of the date hereof, there are no
outstanding Equity Rights with respect to the Company and there are no
outstanding obligations of the Company or any of its Subsidiaries to
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repurchase, redeem, or otherwise acquire any equity interests of the Company nor
are there any outstanding obligations of the Company or any of its Subsidiaries
to make payments to any Person, such as "phantom stock" payments, where the
amount thereof is calculated with reference to the fair market value or equity
value of the Company or any of its Subsidiaries.
7.13 Subsidiaries and Certain Investments. (a) Part A of Schedule
III is a complete and correct list of all of the Subsidiaries of the Company as
of the date hereof, together with, for each such Subsidiary, (i) the
jurisdiction of organization of such Subsidiary, (ii) each Person holding equity
interests in such Subsidiary and (iii) the nature of the equity interests held
by each such Person and the percentage of ownership of such Subsidiary
represented by such equity interests. Except as disclosed in Part A of Schedule
III, (i) the Company and/or one or more of its Subsidiaries owns, free and clear
of Liens, and has the unencumbered right to vote, all outstanding ownership
interests in each Person shown to be held by it in Part A of Schedule III, (ii)
all of such issued and outstanding equity interests are validly issued, fully
paid and nonassessable and (iii) there are no outstanding subscriptions,
options, warrants, commitments, preemptive rights or agreements of any kind
(including, without limitation, any shareholders' or voting trust agreements)
for the issuance, sale, registration or voting of, or securities convertible
into, any additional shares of equity interests of any type in, such Person.
(b) Part B of Schedule III is a complete and correct list of all
Investments (other than Permitted Investments and Investments identified in Part
A of Schedule III) held by the Company or any of its Subsidiaries in any Person
on the date hereof and, for each such Investment, the identity of the Person or
Persons holding such Investment and the nature of such Investment.
7.14 True and Complete Disclosure. The information, reports,
financial statements, exhibits and schedules (other than projections) furnished
in writing by or on behalf of the Company to any Agent or any Lender in
connection with the negotiation, preparation or delivery of this Agreement and
the other Credit Documents or included herein or therein or delivered pursuant
hereto or thereto (other than projections), when taken as a whole (together with
the Information Memorandum) do not contain any untrue statement of material fact
or omit to state any material fact necessary to make the statements herein or
therein, in light of the circumstances under which they were made, not
misleading. The projections, estimates and/or pro forma financial statements
furnished by or on behalf of the Company to the Agents or any Lender in
connection with the negotiation, execution and delivery of this Agreement and
the other Credit Documents or included herein or therein or delivered pursuant
hereto or thereto, have been prepared by the Company in good faith on the basis
of information and assumptions that the Company believed to be reasonable as of
the date of such information. All written information furnished after the date
hereof by the Company and its Subsidiaries to the Agents and the Lenders in
connection with this Agreement and the other Credit Documents and the
transactions contemplated hereby and thereby will not contain any untrue
statement of material fact or omit to state any material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading, or (in the case of projections, estimates and pro forma
financial statements) will be prepared in good faith on the basis of information
and assumptions believed by the Company to be reasonable as of the date of such
information. There is no fact known to the Company that could reasonably be
expected to result in a Material Adverse Effect that has not been disclosed
herein, in the other Credit Documents or
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in a report, financial statement, exhibit, schedule, disclosure letter or other
writing furnished to the Lenders for use in connection with the transactions
contemplated hereby or thereby. Notwithstanding anything in this Section 7.14 to
the contrary, no representation is made in this Section 7.14 with respect to
Section 4 or Appendix D of the Information Memorandum.
7.15 Year 2000. All reprogramming or replacements required to
permit the proper functioning (but only to the extent that such proper
functioning would otherwise be impaired by the occurrence of the year 2000), in
and following the year 2000, of the computer systems and other equipment
containing embedded microchips of the Company and its Subsidiaries, and the
testing of all such systems and equipment, as so reprogrammed, are expected to
be completed by the end of the third quarter of 1999, except to the extent the
failure to complete such reprogramming, replacements and testing by such time
could not reasonably be expected to result in a Material Adverse Effect. The
cost to the Company and its Subsidiaries of such reprogramming, replacements and
testing and of the reasonably foreseeable consequences of year 2000 to the
Company and its Subsidiaries is not anticipated to result in a Material Adverse
Effect.
Section 8. Covenants of the Company. The Company covenants and
agrees with the Lenders and the Agents that, so long as any Commitment or Loan
is outstanding and until payment in full of all amounts payable by the Company
hereunder:
8.01 Financial Statements, Etc. The Company shall deliver to the
Administrative Agent:
(a) as soon as available and in any event within 60 days after
the end of each of the first three quarterly fiscal periods of each
fiscal year of the Company, consolidated statements of income, retained
earnings and cash flows of the Company and its Subsidiaries for such
period and for the period from the beginning of the respective fiscal
year to the end of such period, and the related consolidated balance
sheet of the Company and its Subsidiaries as at the end of such period,
setting forth in each case in comparative form the corresponding
consolidated figures for the corresponding periods in the preceding
fiscal year (except that, in the case of balance sheets, such comparison
shall be to the last day of the prior fiscal year), accompanied by a
certificate of a senior financial officer of the Company, which
certificate shall state that said consolidated financial statements
present fairly, in all material respects, the consolidated financial
condition and results of operations of the Company and its Subsidiaries,
in each case in accordance with generally accepted accounting
principles, consistently applied, as at the end of, and for, such period
(subject to normal year-end audit adjustments);
(b) as soon as available and in any event within 120 days after
the end of each fiscal year of the Company, consolidated statements of
income, retained earnings and cash flows of the Company and its
Subsidiaries for such fiscal year and the related consolidated balance
sheet of the Company and its Subsidiaries as at the end of such fiscal
year, setting forth in each case in comparative form the corresponding
consolidated figures for the preceding fiscal year (and accompanied by
an opinion thereon of KPMG Peat Marwick LLP or other independent
certified public accountants of recognized national standing, which
opinion shall state that said consolidated financial statements
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present fairly, in all material respects, the consolidated financial
condition and results of operations of the Company and its Subsidiaries
as at the end of, and for, such fiscal year in accordance with generally
accepted accounting principles), in each case in accordance with
generally accepted accounting principles, consistently applied, as at
the end of, and for, such fiscal year;
(c) promptly upon their becoming available, copies of all
registration statements and regular periodic reports, if any, that the
Company shall have filed with the Securities and Exchange Commission (or
any governmental agency substituted therefor) or any national securities
exchange;
(d) promptly after the Company knows or has reason to believe
that any of the events or conditions specified below with respect to any
Plan or Multiemployer Plan of the Company (which events or conditions,
either individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect) has occurred or exists, a statement
signed by a senior financial officer of the Company setting forth
details respecting such event or condition and the action, if any, that
the Company or its ERISA Affiliate proposes to take with respect thereto
(and a copy of any report or notice filed with or given to the PBGC by
the Company or an ERISA Affiliate of the Company with respect to such
event or condition):
(i) any reportable event, as defined in Section 4043(c) of
ERISA and the regulations issued thereunder, with respect to a
Plan of the Company, as to which the PBGC has not by regulation
waived the requirement of Section 4043(a) of ERISA that it be
notified within 30 days of the occurrence of such event (provided
that a failure to meet the minimum funding standard of Section
412 of the U.S. Tax Code or Section 302 of ERISA, including,
without limitation, the failure to make on or before its due date
a required installment under Section 412(m) of the U.S. Tax Code
or Section 302(e) of ERISA, shall be a reportable event
regardless of the issuance of any waivers in accordance with
Section 412(d) of the U.S. Tax Code); and any request for a
waiver under Section 412(d) of the U.S. Tax Code for any Plan of
the Company;
(ii) the distribution under Section 4041 of ERISA of a
notice of intent to terminate any Plan of the Company or any
action taken by the Company or an ERISA Affiliate of the Company
to terminate any Plan of the Company (other than pursuant to
Section 4041(b) of ERISA);
(iii) the institution by the PBGC of proceedings under
Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Plan of the Company, or the
receipt by the Company or any ERISA Affiliate of the Company of a
notice from a Multiemployer Plan of the Company that such action
has been taken by the PBGC with respect to such Multiemployer
Plan;
(iv) the complete or partial withdrawal from a
Multiemployer Plan of the Company by the Company or any ERISA
Affiliate of the Company that results in liability under Section
4201 or 4204 of ERISA (including the obligation to satisfy
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secondary liability as a result of a purchaser default) or the
receipt by the Company or any ERISA Affiliate of the Company of
notice from a Multiemployer Plan of the Company that it is in
reorganization or insolvency pursuant to Section 4241 or 4245 of
ERISA or that it intends to terminate or has terminated under
Section 4041A of ERISA;
(v) the institution of a proceeding by a fiduciary of any
Multiemployer Plan of the Company against the Company or any
ERISA Affiliate of the Company to enforce Section 515 of ERISA,
which proceeding is not dismissed within 30 days; and
(vi) the adoption of an amendment to any Plan of the
Company that, pursuant to Section 401(a)(29) of the U.S. Tax Code
or Section 307 of ERISA, would result in the loss of tax-exempt
status of the trust of which such Plan is a part if the Company
or an ERISA Affiliate of the Company fails to timely provide
security to such Plan in accordance with the provisions of said
Sections;
(e) promptly after the Company knows or has reason to believe
that any Default has occurred, a notice of such Default describing the
same in reasonable detail and, together with such notice or as soon
thereafter as possible, a description of the action that the Company has
taken or proposes to take with respect thereto; and
(f) from time to time such other information regarding the
financial condition, operations or business of the Company or any of its
Subsidiaries as any Lender (through the Administrative Agent) or any
Agent may reasonably request.
The Company will furnish to the Administrative Agent, at the time it furnishes
each set of financial statements pursuant to clause (a) or (b) above, a
certificate of a senior financial officer of the Company (i) to the effect that
no Default has occurred and is continuing (or, if any Default has occurred and
is continuing, describing the same in reasonable detail and describing the
action that the Company has taken or proposes to take with respect thereto) and
(ii) setting forth in reasonable detail the computations, if any, necessary to
determine whether the Company is in compliance with Sections 8.07, 8.08 and 8.09
hereof as of the end of the respective quarterly fiscal period or fiscal year.
Upon receipt of any financial statement, notice or other information from the
Company under this Section 8.01, the Administrative Agent shall promptly deliver
a copy of the same to each of the Lenders.
8.02 Litigation. The Company will promptly give to each Lender notice of
all legal or arbitral proceedings, and of all proceedings by or before any
Governmental Authority, and any material development in respect of such legal or
other proceedings, affecting the Company or any of its Subsidiaries, except
proceedings that, if adversely determined, could not reasonably be expected
(either individually or in the aggregate) to result in a Material Adverse
Effect. Without limiting the generality of the foregoing, the Company will give
to each Lender notice of the assertion of any environmental matter by any
Person against, or with respect to the activities of, the Company or any of its
Subsidiaries and notice of any alleged violation of or non-compliance with any
Environmental Laws or any permits, licenses or authorizations, other than any
environmental matter or alleged violation that, if adversely determined, could
not
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reasonably be expected (either individually or in the aggregate) to result in a
Material Adverse Effect.
8.03 Existence, Etc. The Company will, and will cause each of its
Subsidiaries to:
(a) preserve and maintain its legal existence and all of its
material rights, privileges, licenses, approvals, consents and
franchises, including, without limitation, all material permits,
licenses and authorizations required from time to time to be obtained
under applicable Environmental Laws, provided that nothing in this
Section 8.03 shall prohibit any transaction expressly permitted under
Section 8.05 hereof;
(b) comply with the requirements of all applicable laws
(including, without limitation, Environmental Laws), rules, regulations
and orders of Governmental Authorities if failure to comply with such
requirements could reasonably be expected (either individually or in the
aggregate) to result in a Material Adverse Effect;
(c) pay and discharge all material taxes, assessments and
governmental charges or levies imposed on it or on its income or profits
or on any of its Property prior to the date on which penalties attach
thereto, except for any such tax, assessment, charge or levy the payment
of which is being contested in good faith and by proper proceedings and
against which, in the opinion of the Company, adequate reserves are
being maintained;
(d) maintain all of its Properties used or useful in its business
in good working order and condition, ordinary wear and tear excepted,
provided that nothing in this Section 8.03(d) shall prevent the Company
or any of its Subsidiaries from discontinuing such maintenance if such
discontinuance is, in the judgment of the Company, desirable in the
conduct of its business and the business of any of its Subsidiaries and
not disadvantageous in any material respect to the Lenders;
(e) keep adequate records and books of account, in which complete
entries will be made in accordance with generally accepted accounting
principles consistently applied; and
(f) permit representatives of any Lender or any Agent, during
normal business hours and upon reasonable notice, to examine, copy and
make extracts from its books and records, to inspect any of its
Properties, and to discuss its business and affairs with its officers,
all to the extent reasonably requested by such Lender or Agent (as the
case may be).
8.04 Insurance. The Company will, and will cause each of its
Subsidiaries to, maintain insurance with financially sound and reputable
insurance companies, and with respect to Property and risks of a character
usually maintained by entities engaged in the same or similar business similarly
situated, against loss, damage and liability of the kinds and in the amounts
customarily maintained by such entities.
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8.05 Prohibition of Fundamental Changes. The Company shall not,
and shall not permit any of its Subsidiaries to, consolidate with or merge into
any other Person or convey, transfer or lease its Property substantially as an
entirety to any Person, and the Company shall not permit any Person to
consolidate with or merge into it or convey, transfer or lease its Property
substantially as an entirety to it, except that any (a) Subsidiary may enter
into any such transaction with the Company, so long as the Company is the
surviving entity and (b) any Subsidiary may enter into any such transaction with
another Subsidiary.
8.06 Limitation on Liens. The Company will not, nor will it
permit any of its Subsidiaries to, create, incur, assume or suffer to exist any
Lien upon any of its Property, whether now owned or hereafter acquired, except:
(a) Liens in existence on the date hereof and Liens in favor of
Motorola, the Company or any of its Subsidiaries;
(b) Liens imposed by any Governmental Authority for taxes,
assessments or charges not yet due or that are being contested in good
faith and by appropriate proceedings if, in the opinion of the Company,
adequate reserves with respect thereto are maintained on the books of
the Company or the affected Subsidiaries, as the case may be, in
accordance with GAAP;
(c) carriers', warehousemen's, mechanics', materialmen's,
repairmen's, landlords' or other like Liens arising in the ordinary
course of business that are not overdue for a period of more than 30
days or that are being contested in good faith and by appropriate
proceedings and Liens securing judgments but only to the extent for an
amount and for a period not resulting in an Event of Default under
Section 9(e) hereof;
(d) pledges or deposits under worker's compensation, unemployment
insurance and other social security legislation;
(e) deposits to secure the performance of bids, trade contracts
(other than for Indebtedness), leases, utilities, statutory obligations,
surety and appeal bonds, performance bonds and other obligations of a
like nature incurred in the ordinary course of business;
(f) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business and
encumbrances consisting of zoning restrictions, easements, licenses,
restrictions on the use of Property or minor defects, irregularities or
imperfections in title, and encumbrances and statutory Liens, that, in
the aggregate, are not material in amount, and that do not in any case
materially detract from the value of the Property subject thereto or
interfere with the ordinary conduct of the business of the Company or
any of its Subsidiaries;
(g) Liens in favor of any Governmental Authority to secure
progress, advance or other payments, or pursuant to any contract,
license, permit or provision of any statute;
(h) Liens on Property existing at the time of acquisition thereof
(including acquisition through merger or consolidation);
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(i) bankers' Liens arising out of or with respect to the credit
balance maintained by the Company in one or more deposit accounts to the
extent not prohibited by Section 8.08 hereof;
(j) Liens on Property to secure the payment of all or any part of
the purchase price or construction cost thereof or to secure any
Indebtedness incurred prior to, at the time of, or within 180 days
after, the acquisition of such Property, the completion of any
construction or the commencement of full operation, for the purpose of
financing all or any part of the purchase price or construction cost
thereof;
(k) Liens in connection with any Capital Lease Obligation not
prohibited pursuant to Section 8.07 hereof;
(l) any extension, renewal or replacement (or successive
extensions, renewals or replacements), as a whole or in part, of any
Lien referred to in the foregoing clauses (a) through (k), inclusive,
provided that such extension, renewal or replacement Lien shall be
limited to all or a part of the same Property secured by the Lien so
extended, renewed or replaced (plus improvements on such Property);
(m) Liens on Property to secure Indebtedness permitted under
clauses (b) and (g) of Section 8.07 hereof; and
(n) Liens arising in connection with the Iridium clearinghouse
function (as described in Article IV of the Gateway Authorization
Agreements between the investors party thereto and the Company).
8.07 Indebtedness. The Company will not, nor will it permit any
of its Subsidiaries to, create, incur or suffer to exist any Indebtedness
except:
(a) Indebtedness owing to the Lenders hereunder;
(b) Indebtedness of the Company or any of its Subsidiaries under
the Secured Credit Agreement or any guarantee referred to therein;
(c) Indebtedness of the Company in respect of the Existing Senior
Subordinated Notes, and other Indebtedness outstanding on the date
hereof and identified in Schedule IV hereto;
(d) Indebtedness of the Company or any of its Subsidiaries owing
to Motorola (including, without limitation, obligations (to the extent
such obligations constitute Indebtedness) of the Company in respect of
(i) the Space System Contract effective July 29, 1993, (ii) the
Operations and Maintenance Contract effective July 29, 1993, (iii) the
Terrestrial Network Development Contract effective January 1, 1993 (in
each of the foregoing clauses (i), (ii) and (iii) between the Company
(as transferee of Iridium LLC) and Motorola and as amended and in effect
from time to time) and (iv) any other agreement entered into between the
Company and Motorola in connection with the Iridium Business);
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(e) Indebtedness of Subsidiaries of the Company owing to the
Company or to other Subsidiaries of the Company;
(f) Indebtedness of any Person existing at the time such Person
merges into or consolidates with or becomes a Subsidiary of the Company
and Indebtedness secured by a Lien encumbering any Property acquired by
such Person, which Indebtedness was not incurred in anticipation of, and
was outstanding prior to, such merger, consolidation or acquisition, and
Indebtedness of the Company or any of its Subsidiaries incurred to
refinance Indebtedness permitted under this clause (f), provided that
the amount of such Indebtedness does not exceed the amount of the
Indebtedness being so refinanced; and
(g) Indebtedness incurred after the Closing Date (including,
without limitation, Indebtedness the proceeds of which are used to
refinance any other Indebtedness permitted under this Section 8.07),
provided that, immediately after giving effect to such incurrence of
such Indebtedness and the receipt and application of the proceeds
thereof, the sum of the aggregate outstanding principal amount of such
Indebtedness of the Company and its Subsidiaries under clauses (a), (b),
(c) (other than in respect of the Existing Senior Subordinated Notes),
(d) and this clause (g) of this Section 8.07 would not exceed
$5,000,000,000.
8.08 Investments. The Company will not, nor will it permit any of
its Subsidiaries to, make or permit to remain outstanding any Investments
except:
(a) Investments outstanding on the date hereof and identified in
Schedule III hereto;
(b) deposit accounts with banks;
(c) Permitted Investments;
(d) Investments by the Company and its Subsidiaries in the
Company and its Subsidiaries; and
(e) other Investments in an aggregate outstanding amount not at
any time exceeding $100,000,000 (measured by the amount of each such
Investment as of the time such Investment is made).
8.09 Restricted Payments. The Company will not, nor will it
permit any of its Subsidiaries to, declare or make any Restricted Payment at any
time, except that:
(a) so long as no Default shall have occurred and be continuing,
the Company may make distributions to Iridium LLC to enable Iridium LLC
to make distributions to the members of Iridium LLC pursuant to Section
3.07(c) of the Limited Liability Company Agreement of Iridium LLC with
respect to each such member's U.S. income tax liability (if any);
(b) the Company may make any distribution to Iridium LLC to
enable Iridium LLC to redeem fractional interests of its equity
interests following the exercise of any
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warrants, options or other rights to acquire any equity interests in
Iridium LLC by the holders thereof; and
(c) the Company may make payments of interest on the Existing
Senior Subordinated Notes as (and only to the extent) required in
accordance with the terms thereof (and subject to the subordination
provisions applicable thereto).
Except as expressly limited by the preceding sentence, nothing
herein shall be deemed to prohibit the payment of distributions or dividends by
any Subsidiary of the Company to the Company or to any other Subsidiary of the
Company.
8.10 Lines of Business. The Company will not, nor will it permit
any of its Subsidiaries to, engage to any substantial extent in any line or
lines of business activity other than the Iridium Business.
8.11 Transactions with Affiliates. Except as expressly permitted
by this Agreement, the Company will not, nor will it permit any of its
Subsidiaries to, directly or indirectly: (a) make any Investment in an
Affiliate; (b) transfer, sell, lease, assign or otherwise dispose of any
Property to an Affiliate; or (c) merge into or consolidate with or purchase or
acquire Property from an Affiliate; provided that the Company and its
Subsidiaries may enter into any such transaction not otherwise prohibited by the
terms of this Agreement (i) provided for and pursuant to any agreements that the
Company is or will be a party to in connection with the Iridium Business, (ii)
if the monetary or business consideration arising therefrom would, in the
opinion of the Company, be substantially as advantageous to the Company and its
Subsidiaries as the monetary or business consideration that would be obtained in
a comparable transaction with a Person not an Affiliate or (iii) so long as the
aggregate amount of all such transactions (other than any such permitted under
clauses (i) and (ii) above) does not exceed $10,000,000 in the aggregate.
8.12 Use of Proceeds. The Company will use the proceeds of the
Loans hereunder solely (i) to repay outstanding amounts under the Existing
Guaranteed Credit Agreement and the Existing Secured Credit Agreement and to pay
fees and expenses relating thereto, (ii) to pay or reimburse costs relating to
the Iridium Business, (iii) to pay fees and expenses payable to the Global Lead
Arrangers, the Agents and the Lenders in connection with this Agreement and (iv)
for other general purposes of the Company (in each case, in compliance with all
applicable legal and regulatory requirements, including, without limitation,
Regulations T, U and X and the Securities Act of 1933 and the Securities
Exchange Act of 1934 and the regulations thereunder); provided that neither any
Agent nor any Lender shall have any responsibility as to the use of any of such
proceeds.
8.13 Modifications of LLC Agreement. The Company will not consent
to any modification, supplement or waiver of any of the provisions of the LLC
Agreement that could reasonably be likely to adversely affect the interests of
the Lenders. Promptly following the execution and delivery of each modification,
supplement or waiver relating to the LLC Agreement, the Company shall furnish a
copy thereof to the Administrative Agent.
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Section 9. Events of Default. If one or more of the following
events (herein called "Events of Default") shall occur and be continuing:
(a) The Company shall: (i) default in the payment of any
principal of any Loan when due (whether at stated maturity or at
prepayment); or (ii) default in the payment of any interest on any Loan
or any fee payable by it hereunder or under any other Credit Document
when due and such default shall have continued unremedied for three or
more Business Days; or (iii) default in the payment of any other amount
payable by it hereunder when due and such default shall have continued
unremedied for fifteen or more days; or
(b) The Company or any of its Subsidiaries shall default in the
payment when due (after the expiration of applicable grace periods) of
any principal of or interest on any of its other Indebtedness having an
outstanding principal amount of $10,000,000 individually or in the
aggregate; or any event specified in any note, agreement, indenture or
other document evidencing or relating to any such Indebtedness shall
occur if the effect of such event is to cause, or (with the giving of
any notice or the lapse of time or both) to permit the holder or holders
of such Indebtedness (or a trustee or agent on behalf of such holder or
holders) to cause, such Indebtedness to become due, or to be prepaid in
full (whether by redemption, purchase, offer to purchase or otherwise),
prior to its stated maturity or to have the interest rate thereon reset
to a level so that securities evidencing such Indebtedness trade at a
level specified in relation to the par value thereof; or
(c) Any representation, warranty or certification made or deemed
made by the Company herein (or in any modification or supplement
hereto), or in any certificate furnished to any Lender or any Agent
pursuant to the provisions hereof, shall prove to have been false or
misleading as of the time made or furnished in any material respect; or
(d) The Company shall default in the performance of any of its
obligations under any of Sections 8.01(e) (with respect to Company
Defaults only), 8.05, 8.07, 8.09 or 8.12 hereof or the first sentence of
Section 8.13 hereof; or the Company shall default in the performance of
any of its other obligations in this Agreement and such default shall
continue unremedied for a period of 30 or more days after notice thereof
to the Company by the Administrative Agent or any Lender (through the
Administrative Agent); or
(e) A final judgment or judgments for the payment of money of
$10,000,000 or more in the aggregate (exclusive of judgment amounts
fully covered by insurance where the insurer has admitted liability in
respect of such judgment) shall be rendered by one or more courts,
administrative tribunals or other bodies having jurisdiction against the
Company or any of its Subsidiaries and the same shall not be discharged
(or provision shall not be made for such discharge), or a stay of
execution thereof shall not be procured, within 30 days from the date of
entry thereof and the Company or the relevant Subsidiary shall not,
within said period of 30 days, or such longer period during which
execution of the same shall have been stayed, appeal therefrom and cause
the execution thereof to be stayed during such appeal; or
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(f) Motorola or any of the Motorola Domestic Subsidiaries shall
admit in writing its inability to, or be generally unable to, pay its
debts as such debts become due; or
(g) The Company, or one or more Subsidiaries which, individually
or in the aggregate, have at least 10% of the assets or revenues of the
Company and its Subsidiaries taken as a whole, or Motorola or any of the
Motorola Domestic Subsidiaries, shall (i) apply for or consent to the
appointment of, or the taking of possession by, a receiver, custodian,
trustee, examiner or liquidator of itself or of all or a substantial
part of its Property, (ii) make a general assignment for the benefit of
its creditors, (iii) commence a voluntary case under the U. S.
Bankruptcy Code, (iv) file a petition seeking to take advantage of any
other law relating to bankruptcy, insolvency, reorganization,
liquidation, dissolution, arrangement or winding-up, or composition or
readjustment of debts, (v) fail to controvert in a timely and
appropriate manner, or acquiesce in writing to, any petition filed
against it in an involuntary case under the U.S. Bankruptcy Code or (vi)
take any corporate or other analogous action for the purpose of
effecting any of the foregoing; or
(h) A proceeding or case shall be commenced, without the
application or consent of the Company, or one or more Subsidiaries
which, individually or in the aggregate, have at least 10% of the assets
or revenues of the Company and its Subsidiaries taken as a whole, or
Motorola or any of the Motorola Domestic Subsidiaries, in any court of
competent jurisdiction, seeking (i) its reorganization, liquidation,
dissolution, arrangement or winding-up, or the composition or
readjustment of its debts, (ii) the appointment of a receiver,
custodian, trustee, examiner, liquidator or the like of the Company or
such Subsidiary, or Motorola or such Motorola Domestic Subsidiary, as
the case may be, or of all or any substantial part of its Property or
(iii) similar relief in respect of the Company or such Subsidiary, or
Motorola or such Motorola Domestic Subsidiary, as the case may be, under
any law relating to bankruptcy, insolvency, reorganization, winding-up,
or composition or adjustment of debts, and such proceeding or case shall
continue undismissed, or an order, judgment or decree approving or
ordering any of the foregoing shall be entered and continue unstayed and
in effect, for a period of 60 or more days; or an order for relief
against the Company or such Subsidiary, or Motorola or such Motorola
Domestic Subsidiary, as the case may be, shall be entered in an
involuntary case under the U.S. Bankruptcy Code; or
(i) Any representation, warranty or certification made or deemed
made by Motorola in the Motorola Guarantee Agreement (or in any
modification or supplement thereto) or herein, or in any certificate
furnished to any Lender or any Agent pursuant to the provisions of the
Motorola Guarantee Agreement or Section 6.01(d), 6.02 or 6.03 hereof,
shall prove to have been false or misleading as of the time made or
furnished in any material respect; or
(j) Motorola shall default in the performance of any of its
obligations under any of Sections 2, 4.01(e), 4.04, 4.05 and 4.06 of the
Motorola Guarantee Agreement; or Motorola shall default in the
performance of any of its other obligations in the Motorola Guarantee
Agreement and such default shall continue unremedied for a period of 30
or
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more days after notice thereof to the Company and Motorola by the
Administrative Agent or any Lender (through the Administrative Agent);
or
(k) Motorola or any of the Motorola Domestic Subsidiaries shall
default in the payment when due (after the expiration of applicable
grace periods) of any principal of or interest on any of its
Indebtedness aggregating in amount at least equal to 3% of amount of
total stockholders' equity for Motorola and its consolidated
Subsidiaries (determined on a consolidated basis without duplication in
accordance with generally accepted accounting principles) as at the last
day of the most recently completed fiscal quarter of Motorola
("Motorola's Net Worth"); or any event specified in any note, agreement,
indenture or other document evidencing or relating to any such
Indebtedness shall occur if the effect of such event is to cause, or
(with the giving of any notice or the lapse of time or both) to permit
the holder or holders of such Indebtedness (or a trustee or agent on
behalf of such holder or holders) to cause, such Indebtedness to become
due, or to be prepaid in full (whether by redemption, purchase, offer to
purchase or otherwise), prior to its stated maturity or to have the
interest rate thereon reset to a level so that securities evidencing
such Indebtedness trade at a level specified in relation to the par
value thereof; or
(l) A final judgment or judgments for the payment of money in
excess of 3% of Motorola's Net Worth (exclusive of judgment amounts
fully covered by insurance where the insurer has admitted liability in
respect of such judgment) shall be rendered by one or more courts,
administrative tribunals or other bodies having jurisdiction against
Motorola or any of the Motorola Domestic Subsidiaries and the same shall
not be discharged (or provision shall not be made for such discharge),
or a stay of execution thereof shall not be procured, within 60 days
from the date of entry thereof and Motorola or the relevant Motorola
Domestic Subsidiary shall not, within said period of 60 days, or such
longer period during which execution of the same shall have been stayed,
appeal therefrom and cause the execution thereof to be stayed during
such appeal; or
(m) Except for expiration in accordance with its terms, the
Motorola Guarantee Agreement shall for whatever reason be terminated or
cease to be in full force and effect, or the enforceability thereof
shall be contested by Motorola; or
(n) Motorola shall cease to be the direct or indirect, through a
Wholly Owned Subsidiary, record and beneficial owner of at least
13,266,713 Class 1 Interests of Iridium LLC (as such number may be
adjusted from time to time by stock splits, stock dividends,
recapitalization or other similar transactions), free and clear of any
Lien (other than any transfer or other restrictions relating to such
interests, to the extent the same constitute Liens, arising by operation
of law or under the Limited Liability Company Agreement of Iridium LLC
or any shareholder or voting agreement to which Motorola or a Wholly
Owned Subsidiary of Motorola is a party in respect of any such interests
held by it);
THEREUPON: (1) in the case of an Event of Default other than one referred to in
clause (g) or (h) of this Section 9 with respect to the Company, the
Administrative Agent may and, upon request of the Majority Lenders, will, by
notice to the Company, terminate the Commitments and/or declare the principal
amount then outstanding of, and the accrued interest on, the Loans
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and all other amounts payable by the Company hereunder (including, without
limitation, any amounts payable under Section 5.05 hereof) to be forthwith due
and payable, whereupon such amounts shall be immediately due and payable without
presentment, demand, protest or other formalities of any kind, all of which are
hereby expressly waived by the Company; and (2) in the case of the occurrence of
an Event of Default referred to in clause (g) or (h) of this Section 9 with
respect to the Company, the Commitments shall automatically be terminated and
the principal amount then outstanding of, and the accrued interest on, the Loans
and all other amounts payable by the Company hereunder (including, without
limitation, any amounts payable under Section 5.05 hereof) shall automatically
become immediately due and payable without presentment, demand, protest or other
formalities of any kind, all of which are hereby expressly waived by the
Company; provided that (x) any acceleration under clause (1) of this Section 9
shall not become effective until three Business Days after receipt of notice
thereof by each of the Company and Motorola (and such notice shall be deemed
rescinded if, prior to such third Business Day, any amount then due and owing
hereunder (other than as a result of such acceleration) shall be paid in full
and all other Events of Default then existing shall have been cured) and (y)
upon payment by Motorola of the Guaranteed Obligations under, and as defined in,
the Motorola Guarantee Agreement (subject to Section 2.09 thereof), the
Commitments then in effect shall automatically terminate.
Section 10. The Agents.
10.01 Appointment, Powers and Immunities. Each Lender hereby
appoints and authorizes each Agent to act as its agent hereunder and under the
other Credit Documents with such powers as are specifically delegated to such
Agent by the terms of this Agreement and of the other Credit Documents, together
with such other powers as are reasonably incidental thereto. Neither Agent
(which term as used in this sentence and in Section 10.05 and the first sentence
of Section 10.06 hereof shall include reference to its affiliates and its own
and its affiliates' officers, directors, employees and agents):
(a) shall have any duties or responsibilities except those
expressly set forth in this Agreement and in the other Credit Documents,
or shall by reason of this Agreement or any other Credit Document be a
trustee for any Lender;
(b) shall be responsible to the Lenders for any recitals,
statements, representations or warranties contained in this Agreement or
in any other Credit Document, or in any certificate or other document
referred to or provided for in, or received by any of them under, this
Agreement or any other Credit Document, or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Credit Document or any other document referred to
or provided for herein or therein or for any failure by the Company or
any other Person to perform any of its obligations hereunder or
thereunder;
(c) shall be required to initiate or conduct any litigation or
collection proceedings hereunder or under any other Credit Document; or
(d) shall be responsible for any action taken or omitted to be
taken by it hereunder or under any other Credit Document or under any
other document or
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instrument referred to or provided for herein or therein or in
connection herewith or therewith, except for its own gross negligence
or willful misconduct.
Each Agent may employ agents and attorneys-in-fact and shall not be responsible
for the negligence or misconduct of any such agents or attorneys-in-fact
selected by it in good faith.
10.02 Reliance by the Agents. Each Agent shall be entitled to
rely upon any certification, notice or other communication (including, without
limitation, any thereof by telephone, telecopy, telegram or cable) reasonably
believed by it to be genuine and correct and to have been signed or sent by or
on behalf of the proper Person or Persons, and upon advice and statements of
legal counsel, independent accountants and other experts selected by such Agent.
As to any matters not expressly provided for by this Agreement or any other
Credit Document, each Agent shall in all cases be fully protected in acting, or
in refraining from acting, hereunder or thereunder in accordance with
instructions given by the Majority Lenders (or, if provided herein, the Majority
Revolving Lenders, the Majority Term Lenders or all of the Lenders), and such
instructions of the Majority Lenders and any action taken or failure to act
pursuant thereto shall be binding on all of the Lenders.
10.03 Defaults. Neither Agent shall be deemed to have knowledge
or notice of the occurrence of a Default unless such Agent has received notice
from a Lender, the Company or Motorola specifying such Default and stating that
such notice is a "Notice of Default". In the event that the Administrative Agent
receives such a notice of the occurrence of a Default, the Administrative Agent
shall give prompt notice thereof to the Lenders. The Administrative Agent shall
(subject to Section 10.07 hereof) take such action with respect to such Default
as shall be directed by the Majority Lenders, provided that, unless and until
the Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default as it shall deem advisable in
the best interest of the Lenders except to the extent that this Agreement
expressly requires that such action be taken, or not be taken, only with the
consent or upon the authorization of the Majority Lenders or all of the Lenders.
10.04 Rights as a Lender. With respect to its Commitment and the
Loans made by it, each of Chase and Barclays Capital (and any successor acting
as Administrative Agent or Documentation Agent, as the case may be) in its
capacity as a Lender hereunder shall have the same rights and powers hereunder
as any other Lender (if it shall be a Lender hereunder) and may exercise the
same as though it were not acting as the Administrative Agent or Documentation
Agent, as the case may be, and the term "Lender" or "Lenders" shall, unless the
context otherwise indicates, include the Administrative Agent or the
Documentation Agent, as the case may be, in its individual capacity. Each of
Chase and Barclays Capital (and any successor acting as Administrative Agent or
Documentation Agent, as the case may be) and its affiliates may (without having
to account therefor to any Lender) accept deposits from, lend money to, make
investments in and generally engage in any kind of banking, trust or other
business with the Company (and any of its Subsidiaries or Affiliates) as if it
were not acting as the Administrative Agent or the Documentation Agent, as the
case may be, and each of Chase and Barclays Capital (and any such successor) and
its affiliates may accept fees and other consideration from the Company (and any
of its Subsidiaries or Affiliates) for services in
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connection with this Agreement or otherwise without having to account for the
same to the other Agent or the Lenders.
10.05 Indemnification. The Lenders agree to indemnify each Agent
(to the extent not reimbursed under Section 11.03 hereof, but without limiting
the obligations of the Company under said Section 11.03) ratably in accordance
with the aggregate principal amount of the Loans held by the Lenders (or, if no
Loans are at the time outstanding, ratably in accordance with their respective
Commitments) for any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind and nature whatsoever that may be imposed on, incurred by or asserted
against such Agent (including by any Lender) arising out of or by reason of any
investigation in or in any way relating to or arising out of this Agreement or
any other Credit Document or any other documents contemplated by or referred to
herein or therein or the transactions contemplated hereby or thereby (including,
without limitation, the costs and expenses that the Company is obligated to pay
under Section 11.03 hereof, but excluding, unless a Default has occurred and is
continuing, normal administrative costs and expenses incident to the performance
of its agency duties hereunder) or the enforcement of any of the terms hereof or
thereof or of any such other documents, provided that no Lender shall be liable
for any of the foregoing to the extent they arise from the gross negligence or
willful misconduct of the party to be indemnified.
10.06 Non-Reliance on the Agents and Other Lenders. Each Lender
agrees that it has, independently and without reliance on the Agents or any
other Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Company and Motorola and
decision to enter into this Agreement and that it will, independently and
without reliance upon the Agents or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own analysis and decisions in taking or not taking action under this
Agreement or under any other Credit Document. Neither Agent shall be required to
keep itself informed as to the performance or observance by either Credit Party
of this Agreement or any of the other Credit Documents or any other document
referred to or provided for herein or therein or to inspect the Properties or
books of the Company or Motorola. Except for notices, reports and other
documents and information expressly required to be furnished to the Lenders by
the Agents hereunder or under any of the other Credit Documents, neither Agent
shall have any duty or responsibility to provide any Lender with any credit or
other information concerning the affairs, financial condition or business of the
Company or Motorola (or any of their respective Subsidiaries or affiliates) that
may come into the possession of such Agent or any of its affiliates.
10.07 Failure to Act. Except for action expressly required of the
Agents hereunder and under the other Credit Documents, each Agent shall in all
cases be fully justified in failing or refusing to act hereunder and thereunder
unless it shall receive further assurances to its satisfaction from the Lenders
of their indemnification obligations under Section 10.05 hereof against any and
all liability and expense that may be incurred by it by reason of taking or
continuing to take any such action.
10.08 Resignation or Removal of the Agents. Subject to the
appointment and acceptance of a successor Agent as provided below, any Agent may
resign at any time by giving notice thereof to the other Agent, the Lenders and
the Company, and any Agent may be removed
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at any time with or without cause by the Majority Lenders. Upon any such
resignation or removal, the Majority Lenders shall have the right to appoint a
successor Agent with the prior consent of the Company (which consent shall not
be unreasonably withheld or delayed). If no successor Agent shall have been so
appointed by the Majority Lenders and shall have accepted such appointment
within 30 days after the retiring Agent's giving of notice of resignation or the
Majority Lenders' removal of the retiring Agent, then the retiring Agent may, on
behalf of the Lenders, appoint a successor Agent, that shall be a bank that has
an office in New York, New York with a combined capital and surplus of at least
$500,000,000. Upon the acceptance of any appointment as an Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
hereunder. After any retiring Agent's resignation or removal hereunder as Agent,
the provisions of this Section 10 shall continue in effect for the benefit of
such Agent in respect of any actions taken or omitted to be taken by it while it
was acting as an Agent.
10.09 Modifications of the Motorola Guarantee Agreement. Except
as otherwise provided in Section 11.04 hereof with respect to this Agreement,
the Administrative Agent may, with the prior consent of the Majority Lenders
(but not otherwise), consent to any modification, supplement or waiver under the
Motorola Guarantee Agreement, provided that, without the prior consent of all of
the Lenders, the Administrative Agent shall not (a) amend any of Sections 2,
5.03 and 5.04 of the Motorola Guarantee Agreement or (b) release Motorola from
any of its obligations under Section 2 or 5.03 thereof or otherwise agree to
terminate the Motorola Guarantee Agreement (except as expressly contemplated by
the terms thereof). Notwithstanding the foregoing, consent of the Lenders shall
not be required in the case of any amendment to the Motorola Guarantee Agreement
that increases the amount specified in Section 2.09(a) thereof in connection
with any increase in Term Commitments under Section 2.03(d) hereof.
10.10 Documentation Agent and Global Lead Arrangers.
Notwithstanding anything herein to the contrary (except as provided in Section
11.12(b)), neither the Documentation Agent nor the Global Lead Arrangers, in
their respective capacities as such, shall have any duties, responsibilities or
liabilities whatsoever under this Agreement or the other Credit Documents.
11. Miscellaneous.
11.01 Waiver. No failure on the part of any Agent or any Lender
to exercise and no delay in exercising, and no course of dealing with respect
to, any right, power or privilege under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, power or
privilege under this Agreement preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. The remedies provided
herein are cumulative and not exclusive of any remedies provided by law.
11.02 Notices. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
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(a) if to the Company, to:
Iridium Operating LLC
1575 Eye Street, N.W.,
Suite 800
Washington, D.C. 20005
Attention: General Counsel
(Telecopy No.: (202) 408-3761);
(b) if to the Administrative Agent, to:
The Chase Manhattan Bank
Loan and Agency Services Group
1 Chase Manhattan Plaza
8th Floor
New York, New York 10081
Attention: Winslowe Ogbourne
(Telecopy No.: (212) 552-5700);
with a copy to:
The Chase Manhattan Bank
270 Park Avenue
New York, New York 10017
Attention: Ronald Lepes/William Rottino
(Telecopy No.: (212) 270-2740/(212) 270-1724);
(c) if to a Lender, to it at its address (or telecopy number) set
forth in its Administrative Questionnaire.
11.03 Expenses, Etc. The Company agrees to pay or reimburse each
of the Global Lead Arrangers, the Agents and the Lenders for: (a) all reasonable
out-of-pocket costs and expenses of the Global Lead Arrangers and the Agents
(including, without limitation, the reasonable fees and expenses of Milbank,
Tweed, Hadley & McCloy, special New York counsel to the Global Lead Arrangers
and the Agents, but not including any fees or expenses for any other counsel to
the Global Lead Arrangers, the Agents or the Lenders) in connection with (i) the
negotiation, preparation, execution and delivery of this Agreement and the other
Credit Documents and the making of the Loans hereunder and (ii) the negotiation
or preparation of any modification, supplement or waiver of any of the terms of
this Agreement or any of the other Credit Documents (whether or not
consummated); (b) all reasonable out-of-pocket costs and expenses of the Lenders
and the Agents (including, without limitation, the reasonable fees and expenses
of legal counsel) in connection with (i) any Default and any enforcement or
collection proceedings resulting therefrom, including, without limitation, all
manner of participation in or other involvement with (x) bankruptcy, insolvency,
receivership, foreclosure, winding up or liquidation proceedings, (y) judicial
or regulatory proceedings and (z) workout, restructuring or other negotiations
or proceedings (whether or not the workout, restructuring or transaction
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contemplated thereby is consummated) and (ii) the enforcement of this Section
11.03; and (c) all transfer, stamp, documentary or other similar taxes,
assessments or charges levied by any Governmental Authority in respect of this
Agreement or any of the other Credit Documents or any other document referred to
herein or therein.
The Company hereby agrees to indemnify each Global Lead Arranger,
each Agent and each Lender and their respective directors, officers, employees,
attorneys and agents from, and hold each of them harmless against, any and all
losses, liabilities, claims, damages or expenses incurred by any of them
(including, without limitation, any and all losses, liabilities, claims, damages
or expenses incurred by any Agent to any Lender), whether or not any Agent or
any Lender is a party thereto, arising out of or by reason of any investigation
or litigation or other proceedings (including any threatened investigation or
litigation or other proceedings) relating to the Loans hereunder or any actual
or proposed use by the Company or any of its Subsidiaries of the proceeds of any
of the Loans hereunder, including, without limitation, the reasonable fees and
disbursements of counsel incurred in connection with any such investigation or
litigation or other proceedings (but excluding any such losses, liabilities,
claims, damages or expenses incurred by reason of the gross negligence or
willful misconduct of the Person to be indemnified).
11.04 Amendments, Etc. Neither this Agreement nor any provision
hereof may be waived, amended or modified except pursuant to an agreement or
agreements in writing entered into by the Company, Motorola and the Majority
Lenders or by the Company, Motorola and the Administrative Agent with the
consent of the Majority Lenders; provided that no such agreement shall (i)
increase the Commitment of any Lender without the written consent of such
Lender, (ii) reduce the principal amount of any Loan or reduce the rate of
interest thereon, or reduce any fees payable hereunder, without the prior
written consent of each Lender directly affected thereby, (iii) postpone the
scheduled date of payment (including any payment under Section 2.08(b)) of the
principal amount of any Loan, or any interest thereon, or any fees payable
hereunder, or reduce the amount of, waive or excuse any such payment, or
postpone the scheduled date of expiration of any Commitment, without the written
consent of each Lender directly affected thereby, (iv) alter the manner in which
payments or prepayments of principal, interest or other amounts hereunder shall
be applied as between the Lenders or Types of Loans, without the written consent
of each Lender directly affected thereby or (v) change any of the provisions of
this Section 11.04 or the definition of the term "Majority Lenders" or any other
provision hereof specifying the number or percentage or Lenders required to
waive, amend or modify any rights hereunder or make any determination or grant
any consent hereunder, without the written consent of each Lender; provided,
further, that no such agreement shall amend, modify or otherwise affect the
rights or duties of any Agent hereunder or under any other Credit Document
without the prior written consent of such Agent; and provided, further, that no
increase of Term Commitments pursuant to Section 2.03(d) hereof shall be deemed
to be an amendment or modification for the purposes of this Section 11.04.
Anything in this Agreement to the contrary notwithstanding (but
subject to clause (ii) of Section 2.03(d) hereof), no waiver or modification of
any provision of this Agreement that has the effect (either immediately or at
some later time) of enabling the Company to satisfy a condition precedent to the
making of a Loan of any one Class shall be effective against the Lenders of such
Class unless the Majority Lenders of such Class shall have concurred with such
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waiver or modification, and no waiver or modification of any provision of this
Agreement or any other Credit Document that could reasonably be expected to
adversely affect the Lenders of any Class in a manner that does not affect all
Classes equally shall be effective against the Lenders of such Class unless the
Majority Lenders of such Class shall have concurred with such waiver or
modification.
11.05 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
11.06 Assignments and Participations.
(a) The Company may not assign or otherwise transfer any of its
rights or obligations hereunder without the prior consent of each Lender (and
any attempted assignment or transfer by the Company without such consent shall
be null and void).
(b) Any Lender may assign to one or more assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans at the time owing to it); provided that
(i) except in the case of an assignment to a Lender or an affiliate of a Lender
or, in the case of a Lender that is an investment fund, to another investment
fund with the same investment advisor as such Lender, each of the Company and
the Administrative Agent shall have consented to such assignment (which consent
shall not be unreasonably withheld), (ii) except in the case of an assignment to
a Lender or an Affiliate of a Lender or an assignment of the entire remaining
amount of the assigning Lender's Commitment, the amount of the Commitment of the
assigning Lender subject to each such assignment shall not be less than
$5,000,000 and, after giving effect to such assignment, the assigning Lender's
Commitment and Loans shall not be less than $5,000,000, in each case determined
as of the date the Assignment and Acceptance with respect to such assignment is
delivered to the Administrative Agent, unless each of the Company and the
Administrative Agent otherwise consent, (iii) each partial assignment of Loans
and/or Commitments of any Class shall be made as an assignment of a
proportionate part of the assigning Lender's Loans and/or Commitments of such
Class, (iv) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Acceptance, together with a processing
and recordation fee of $3,500 for such assignment (except that in the case of
contemporaneous assignments to assignees that are investment funds with the same
investment advisor, such fee shall be payable with respect to one assignment
only), and (v) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire; provided, further, that
any consent of the Company otherwise required under this paragraph shall not be
required if an Event of Default under clause (g) or (h) of Section 9 hereof has
occurred and is continuing. Upon acceptance and recording pursuant to paragraph
(d) of this Section 11.06, from and after the effective date specified in each
Assignment and Acceptance, the assignee thereunder shall be a party hereto and,
to the extent of the interest assigned by such Assignment and Acceptance, have
the rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all of the assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of Sections
5.01, 5.05, 5.06 and 11.03 hereof). Any assignment or transfer by a Lender of
rights or obligations under
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this Agreement that does not comply with this paragraph shall be treated for
purposes of this Agreement as a sale by such Lender of a participation in such
rights and obligations in accordance with paragraph (e) of this Section 11.06.
(c) The Administrative Agent, acting for this purpose as an agent
of the Company, shall maintain at one of its offices in The City of New York a
copy of each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Loans of each Class owing to, each Lender pursuant
to the terms hereof from time to time (the "Register"). The entries in the
Register shall be conclusive, and the Company, the Administrative Agent and the
Lenders may treat each Person whose name is recorded in the Register pursuant to
the terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for
inspection by the Company and any Lender, at any reasonable time and from time
to time upon reasonable prior notice.
(d) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee, the assignee's
completed Administrative Questionnaire (unless the assignee shall already be a
Lender hereunder), the processing and recordation fee referred to in paragraph
(b) of this Section 11.06 and any written consent to such assignment required by
paragraph (b) of this Section 11.06, the Administrative Agent shall accept such
Assignment and Acceptance and record the information contained therein in the
Register. No assignment shall be effective for purposes of this Agreement unless
it has been recorded in the Register as provided in this paragraph.
(e) Any Lender may, without the consent of the Company or the
Administrative Agent, sell participations to one or more banks or other entities
(a "Participant") in all or a portion of such Lender's rights and obligations
under this Agreement and the other Credit Documents (including all or a portion
of its Commitment and the Loans owing to it); provided that (i) such Lender's
obligations under this Agreement and the other Credit Documents shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) the Company, the
Administrative Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Credit Documents. Any agreement
or instrument pursuant to which a Lender sells such a participation shall
provide that such Lender shall retain the sole right to enforce this Agreement
and the other Credit Documents and to approve any amendment, modification or
waiver of any provision of this Agreement or any other Credit Document; provided
that such agreement or instrument may provide that such Lender will not, without
the consent of the Participant, agree to any amendment, modification or waiver
described in the first proviso to Section 11.04 hereof that affects such
Participant. The Company agrees that each Participant shall be entitled to the
benefits of Sections 5.01, 5.05 and 5.06 hereof to the same extent as if it were
a Lender and had acquired its interest by assignment pursuant to paragraph (b)
of this Section 11.06; provided that a Participant shall not be entitled to
receive any greater payment under Section 5.01 or 5.06 hereof than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Company's prior written consent.
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(f) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any such pledge or assignment to a Federal
Reserve Bank, and this Section 11.06 shall not apply to any such pledge or
assignment of a security interest; provided that no such pledge or assignment of
a security interest shall release a Lender from any of its obligations hereunder
or substitute any such assignee for such Lender as a party hereto.
(g) A Lender may furnish any information concerning the Company
or Motorola (or any of their respective Subsidiaries and affiliates) or the
Iridium Business in the possession of such Lender from time to time to assignees
and Participants (including prospective assignees and Participants), subject,
however, to the provisions of Section 11.12(b) hereof.
(h) Anything in this Section 11.06 to the contrary
notwithstanding, no Lender may assign or participate any interest in any Loan
held by it hereunder to the Company or Motorola (or any of their respective
Subsidiaries or affiliates) without the prior consent of each Lender.
11.07 Survival. The obligations of the Company under Sections
5.01, 5.05, 5.06 and 11.03 hereof, and the obligations of the Lenders under
Sections 10.05 and 11.12(b) hereof, shall survive the repayment of the Loans and
the termination of the Commitments and, in the case of any Lender that may
assign any interest in its Commitment or Loans hereunder, shall survive the
making of such assignment with respect to matters occurring prior to such
assignment, notwithstanding that such assigning Lender may cease to be a
"Lender" hereunder. In addition, each representation and warranty made, or
deemed to be made by a notice of any Loan, herein or pursuant hereto shall
survive the making of such representation and warranty, and no Lender shall be
deemed to have waived, by reason of making any Loan, any Default that may arise
by reason of such representation or warranty proving to have been false or
misleading, notwithstanding that such Lender or any Agent may have had notice or
knowledge or reason to believe that such representation or warranty was false or
misleading at the time such Loan was made.
11.08 Captions. The table of contents and captions and section
headings appearing herein are included solely for convenience of reference and
are not intended to affect the interpretation of any provision of this
Agreement.
11.09 Counterparts. This Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart.
11.10 Governing Law; Submission to Jurisdiction. This Agreement
shall be governed by, and construed in accordance with, the law of the State of
New York. The Company hereby submits to the nonexclusive jurisdiction of the
United States District Court for the Southern District of New York and of the
Supreme Court of the State of New York sitting in New York County (including its
Appellate Division), and of any other appellate court in the State of New York,
for the purposes of all legal proceedings arising out of or relating to this
Agreement or the transactions contemplated hereby. The Company hereby
irrevocably waives,
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to the fullest extent permitted by applicable law, any objection that it may now
or hereafter have to the laying of the venue of any such proceeding brought in
such a court and any claim that any such proceeding brought in such a court has
been brought in an inconvenient forum.
11.11 Waiver of Jury Trial. EACH OF THE COMPANY, THE AGENTS, THE
GLOBAL LEAD ARRANGERS AND THE LENDERS HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
11.12 Treatment of Certain Information; Confidentiality.
(a) The Company acknowledges that from time to time financial
advisory, investment banking and other services may be offered or provided to
the Company or one or more of its Subsidiaries (in connection with this
Agreement or otherwise) by any Lender or by one or more subsidiaries or
affiliates of such Lender. The Company hereby agrees that, in the event any such
services are provided to the Company or any of its Subsidiaries, each Lender
providing such services is authorized to share any information delivered to such
Lender by the Company and its Subsidiaries pursuant to this Agreement, or in
connection with the decision of such Lender to enter into this Agreement, to any
such subsidiary or affiliate providing such services, provided that any such
subsidiary or affiliate receiving such information agrees to be bound by the
provisions of paragraph (b) below as if it were a Lender hereunder. Such
authorization shall survive the repayment of the Loans and the termination of
the Commitments.
(b) Each Lender, each Agent and each Global Lead Arranger agrees
(on behalf of itself and each of its affiliates, directors, officers, employees
and representatives) to restrict dissemination of any Confidential Information
(as defined below) only to those of its directors, officers, employees and
representatives who are involved in the evaluation of such information, and to
use reasonable precautions to keep such information confidential, in accordance
with its customary procedures for handling confidential information of the same
nature and in accordance with safe and sound banking practices. For purposes of
this Agreement, "Confidential Information" shall mean any non-public information
supplied to it by the Company, including its contractors, consultants or
sponsors, pursuant to this Agreement or by Motorola pursuant to the Motorola
Guarantee Agreement, that is identified (in writing, in the case of written
information) by the Company or Motorola, as the case may be, as being
confidential at the time the same is delivered to the Lenders, the Agents or the
Global Lead Arrangers, provided that nothing herein shall limit the disclosure
of any such information by any Lender, Agent or Global Lead Arranger (i) after
such information shall have become public (other than through a violation of
this Section 11.12 by such Lender, Agent or Global Lead Arranger), (ii) to the
extent required by statute, rule, regulation or judicial process, (iii) to
counsel or other experts for any of the Lenders, Agents or Global Lead
Arrangers, provided that such counsel or experts shall be bound by the
requirements of this Section 11.12(b) with respect to any such information, (iv)
to bank examiners (or any other regulatory authority having jurisdiction over
any Lender, Agent or Global Lead Arranger), or to auditors or accountants, (v)
to any Global Lead Arranger, any Agent or any other Lender (or to any of their
respective affiliates, provided that any such disclosure to any such affiliate
shall be made on a "need to
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know" basis only for use by such affiliates (and each of its officers, directors
and employees) solely in connection with the transactions contemplated by this
Agreement and each such affiliate (and each of its officers, directors and
employees) shall agree (for the benefit of the Company and Motorola) to be bound
to keep such information confidential on the same terms as set forth in this
Section 11.12), (vi) in connection with any litigation to which any one or more
of the Lenders, the Global Lead Arrangers or the Agents is a party, or in
connection with the enforcement of rights or remedies hereunder or under any
other Credit Document, provided that the party intending to make such disclosure
shall use reasonable efforts to cooperate with the Company or with Motorola, as
the case may be, to reasonably minimize the extent of any such disclosure or to
obtain confidential treatment of information to be disclosed, (vii) to a
subsidiary or affiliate of such Lender as provided in paragraph (a) above or
(viii) to any assignee or participant (or prospective assignee or participant)
so long as such assignee or participant (or prospective assignee or participant)
first executes and delivers to the respective Lender, the Company and Motorola a
confidentiality agreement containing provisions substantially the same as those
in this Section 11.12; provided, further, that in no event shall any Lender,
Agent or Global Lead Arranger be obligated or required to return any materials
furnished by the Company or Motorola hereunder or under the Motorola Guarantee
Agreement, respectively, except to the extent it has agreed to do so in writing
in conjunction with the receipt of such information. The obligations of any
assignee that has executed a confidentiality agreement as provided above shall
be superseded by this Section 11.12 on the date upon which such assignee becomes
a Lender hereunder pursuant to Section 11.06(b) hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Senior
Guaranteed Credit Agreement to be duly executed and delivered as of the day and
year first above written.
IRIDIUM OPERATING LLC
By
--------------------------------
Name:
Title:
Senior Guaranteed Credit Agreement
<PAGE> 63
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LENDERS
THE CHASE MANHATTAN BANK
By
------------------------------
Name:
Title:
Senior Guaranteed Credit Agreement
<PAGE> 64
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BARCLAYS BANK PLC
By
-----------------------------------
Name:
Title:
Senior Guaranteed Credit Agreement
<PAGE> 65
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BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By
-----------------------------------
Name:
Title:
Senior Guaranteed Credit Agreement
<PAGE> 66
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BANQUE NATIONALE DE PARIS
By
------------------------------------
Name:
Title:
Senior Guaranteed Credit Agreement
<PAGE> 67
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DRESDNER BANK AG, NEW YORK AND
GRAND CAYMAN BRANCHES
By
--------------------------------------
Name:
Title:
Senior Guaranteed Credit Agreement
<PAGE> 68
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ISTITUTO BANCARIO SAN PAOLO DI
TORINO ISTITUTO MOBILIARE ITALIANO
S.P.A. - NEW YORK BRANCH
By
------------------------------------
Name:
Title:
By
------------------------------------
Name:
Title:
Senior Guaranteed Credit Agreement
<PAGE> 69
- 65 -
TORONTO DOMINION (TEXAS), INC.
By
---------------------------------
Name:
Title:
Senior Guaranteed Credit Agreement
<PAGE> 70
- 66 -
WESTDEUTSCHE LANDESBANK
GIROZENTRALE
By
------------------------------
Name:
Title:
Senior Guaranteed Credit Agreement
<PAGE> 71
- 67 -
ABN AMRO BANK N.V.
By
------------------------------
Name:
Title:
Senior Guaranteed Credit Agreement
<PAGE> 72
- 68 -
CITIBANK, N.A.
By
---------------------------------
Name:
Title:
Senior Guaranteed Credit Agreement
<PAGE> 73
- 69 -
COMMERZBANK AG, NEW YORK BRANCH
By
-----------------------------------
Name:
Title:
By
-----------------------------------
Name:
Title:
Senior Guaranteed Credit Agreement
<PAGE> 74
- 70 -
DEUTSCHE BANK AG NEW YORK AND/OR
CAYMAN ISLANDS BRANCHES
By
----------------------------------
Name:
Title:
By
---------------------------------
Name:
Title:
Senior Guaranteed Credit Agreement
<PAGE> 75
- 71 -
UBS AG, STAMFORD BRANCH
By
-------------------------------
Name:
Title:
By
-------------------------------
Name:
Title:
Senior Guaranteed Credit Agreement
<PAGE> 76
- 72 -
BANCA COMMERCIALE ITALIANA - NEW
YORK BRANCH
By
--------------------------------
Name:
Title:
Senior Guaranteed Credit Agreement
<PAGE> 77
- 73 -
BANCA MONTE DEI PASCHI DI SIENA
By
--------------------------------
Name:
Title:
Senior Guaranteed Credit Agreement
<PAGE> 78
- 74 -
BANCA NAZIONALE DEL LAVORO S.P.A.-
NEW YORK BRANCH
By
---------------------------------
Name:
Title:
Senior Guaranteed Credit Agreement
<PAGE> 79
- 75 -
BANCO DI NAPOLI S.P.A.
By
-----------------------------
Name:
Title:
Senior Guaranteed Credit Agreement
<PAGE> 80
- 76 -
BANK HAPOALIM B.M.
By
-----------------------------
Name:
Title:
By
-----------------------------
Name:
Title:
Senior Guaranteed Credit Agreement
<PAGE> 81
- 77 -
BANK OF MONTREAL
By
----------------------------------
Name:
Title:
Senior Guaranteed Credit Agreement
<PAGE> 82
- 78 -
BAYERISCHE LANDESBANK
GIROZENTRALE CAYMAN ISLANDS
BRANCH
By
---------------------------------
Name:
Title:
By
---------------------------------
Name:
Title:
Senior Guaranteed Credit Agreement
<PAGE> 83
- 79 -
CIBC INC.
By
--------------------------------
Name:
Title:
Senior Guaranteed Credit Agreement
<PAGE> 84
- 80 -
COMPAGNIE FINANCIERE DE CIC ET DE
L'UNION EURPOEENNE
By
------------------------------------
Name:
Title:
Senior Guaranteed Credit Agreement
<PAGE> 85
- 81 -
CREDIT LYONNAIS CHICAGO BRANCH
By
---------------------------------
Name:
Title:
Senior Guaranteed Credit Agreement
<PAGE> 86
- 82 -
THE FIRST NATIONAL BANK OF CHICAGO
By
------------------------------------
Name:
Title:
Senior Guaranteed Credit Agreement
<PAGE> 87
- 83 -
LANDESBANK HESSEN-THURINGEN
GIROZENTRALE
By
-----------------------------------
Name:
Title:
By
-----------------------------------
Name:
Title:
Senior Guaranteed Credit Agreement
<PAGE> 88
- 84 -
KBC FINANCE IRELAND
By
-----------------------------
Name:
Title:
Senior Guaranteed Credit Agreement
<PAGE> 89
- 85 -
PACIFIC LIFE INSURANCE COMPANY
By
-----------------------------------
Name:
Title:
Senior Guaranteed Credit Agreement
<PAGE> 90
- 86 -
REPUBLIC NATIONAL BANK OF NEW YORK
By
-----------------------------------
Name:
Title:
Senior Guaranteed Credit Agreement
<PAGE> 91
- 87 -
ROYAL BANK OF SCOTLAND PLC
By
---------------------------------
Name:
Title:
Senior Guaranteed Credit Agreement
<PAGE> 92
- 88 -
BANK AUSTRIA CREDITANSTALT
CORPORATE FINANCE, INC.
By
----------------------------------
Name:
Title:
By
----------------------------------
Name:
Title:
Senior Guaranteed Credit Agreement
<PAGE> 93
- 89 -
THE NORTHERN TRUST COMPANY
By
---------------------------------
Name:
Title:
Senior Guaranteed Credit Agreement
<PAGE> 94
- 90 -
GLOBAL LEAD ARRANGERS
CHASE SECURITIES INC.,
as a Global Lead Arranger
By
---------------------------------
Name:
Title:
BARCLAYS BANK PLC,
as a Global Lead Arranger
By
---------------------------------
Name:
Title:
Senior Guaranteed Credit Agreement
<PAGE> 95
- 91 -
ADMINISTRATIVE AGENT
THE CHASE MANHATTAN BANK
By
-----------------------------------
Name:
Title:
Senior Guaranteed Credit Agreement
<PAGE> 96
- 92 -
DOCUMENTATION AGENT
BARCLAYS BANK PLC
By
------------------------------------
Name:
Title:
Senior Guaranteed Credit Agreement
<PAGE> 97
SCHEDULE I
Commitments
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
Revolving Initial Term
Lenders Commitments Term Commitments Loan Amount
- ------- ----------- ---------------- -----------
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
THE CHASE MANHATTAN BANK
- ---------------------------------------------------------------------------------------------
BARCLAYS BANK PLC
- ---------------------------------------------------------------------------------------------
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
- ---------------------------------------------------------------------------------------------
BANQUE NATIONALE DE PARIS
- ---------------------------------------------------------------------------------------------
DRESDNER BANK AG, NEW YORK AND GRAND
CAYMAN BRANCHES
- ---------------------------------------------------------------------------------------------
INSTITUTO BANCARIO SAN PAOLO DI
TORINO INSTITUTO MOBILIARE ITALIANO
S.P.A. - NEW YORK BRANCH
- ---------------------------------------------------------------------------------------------
TORONTO DOMINION (TEXAS), INC.
- ---------------------------------------------------------------------------------------------
WESTDEUTSCHE LANDESBANK GIROZENTRALE
- ---------------------------------------------------------------------------------------------
ABN AMRO BANK N.V.
- ---------------------------------------------------------------------------------------------
CITIBANK, N.A.
- ---------------------------------------------------------------------------------------------
COMMERZBANK AG, NEW YORK BRANCH
- ---------------------------------------------------------------------------------------------
DEUTSCHE BANK AG, NEW YORK BRANCH
- ---------------------------------------------------------------------------------------------
UBS AG, STAMFORD BRANCH
- ---------------------------------------------------------------------------------------------
BANCA COMMERCIALE ITALIANA - NEW YORK
BRANCH
- ---------------------------------------------------------------------------------------------
BANCA MONTE DEI PASCHI DI SIENA
- ---------------------------------------------------------------------------------------------
BANCA NAZIONALE DEL LAVORO S.P.A. -
NEW YORK BRANCH
- ---------------------------------------------------------------------------------------------
BANCO DI NAPOLI S.P.A.
- ---------------------------------------------------------------------------------------------
BANK HAPOALIM B.M.
- ---------------------------------------------------------------------------------------------
BANK OF MONTREAL
- ---------------------------------------------------------------------------------------------
</TABLE>
Schedule I
<PAGE> 98
- 2 -
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
BAYERISCHE LANDESBANK GIROZENTRALE
CAYMAN ISLANDS BRANCH
- ---------------------------------------------------------------------------------------------
CIBC INC.
- ---------------------------------------------------------------------------------------------
COMPAGNIE FINANCIERE DE CIC ET DE
L'UNION EUROPEENE
- ---------------------------------------------------------------------------------------------
THE FIRST NATIONAL BANK OF CHICAGO
- ---------------------------------------------------------------------------------------------
LANDESBANK HESSEN-THURINGEN
GIROZENTRALE
- ---------------------------------------------------------------------------------------------
KBC FINANCE IRELAND
- ---------------------------------------------------------------------------------------------
PACIFIC LIFE INSURANCE COMPANY
- ---------------------------------------------------------------------------------------------
REPUBLIC NATIONAL BANK OF NEW YORK
- ---------------------------------------------------------------------------------------------
ROYAL BANK OF SCOTLAND PLC
- ---------------------------------------------------------------------------------------------
CREDIT LYONNAIS CHICAGO BRANCH
- ---------------------------------------------------------------------------------------------
BANK AUSTRIA CREDITANSTALT CORPORATE
FINANCE, INC.
- ---------------------------------------------------------------------------------------------
THE NORTHERN TRUST COMPANY
- ---------------------------------------------------------------------------------------------
------------ ------------ ------------
- ---------------------------------------------------------------------------------------------
</TABLE>
Schedule I
<PAGE> 99
SCHEDULE II
Litigation
[see Section 7.03]
None
Schedule II
<PAGE> 100
SCHEDULE III
Subsidiaries and Investments
[See Sections 7.13 and 8.08(a)]
IOLLC
Part A - Subsidiaries
<TABLE>
<CAPTION>
Name of Jurisdiction of Holder of Equity Nature of Equity Percentage
Subsidiary Incorporation Interests Interests Ownership
---------- ------------- --------- --------- ---------
<S> <C> <C> <C> <C>
Iridium Capital Delaware Iridium Common 100%
Corporation Operating LLC Stock
Iridium IP LLC Delaware Iridium Membership 100%
Operating LLC Interests
Iridium Delaware Iridium Membership 100%
Roaming LLC Operating LLC Interests
Iridium Delaware Iridium Common 100%
Facilities Operating LLC Stock
Corporation
Iridium New Brunswick, Iridium Common 100%
Canada Canada Operating LLC Stock
Facilities Inc.
</TABLE>
The above-referenced equity interests are subject to Liens granted
pursuant to (i) the Existing Secured Credit Agreement and the other Credit
Documents referred to therein, and (ii) the Secured Credit Agreement and the
other Credit Documents referred to therein.
Part B - Other Investments
None
Schedule III
<PAGE> 101
SCHEDULE IV
Indebtedness
[See Section 8.07]
<TABLE>
<CAPTION>
Principal Amount Principal Amount
Title of Agreement Outstanding Outstanding
------------------ ---------------- ----------------
<C> <C> <C>
1. Indenture, dated as of July 16, 1997, $300 million $300 million
relating to the Company's and
Capital's 13% Senior Notes due 2005,
Series A (Guaranteed by certain
Subsidiaries), and the Notes
thereunder
2. Indenture, dated as of July 16, 1997, $500 million $500 million
relating to the Company's and
Capital's 14% Senior Notes due 2005,
Series B (Guaranteed by certain
Subsidiaries), and the Notes
thereunder
3. Indenture, dated as of October 17, $300 million $300 million
1997, relating to the Company's and
Capital's 11 1/4% Senior Notes due
2005, Series C (Guaranteed by certain
Subsidiaries), and the Notes
thereunder
4. 14 1/2% Senior Subordinated Discount Approx. $272 million $480.2 million (fully
Notes Due 2006 (accreted value) accreted value)
5. Indenture, dated as of May 13, 1998, $350 million $350 million
Relating to the Company's and
Capital's 10 7/8% Senior Notes due
2005, Series D (Guaranteed by certain
Subsidiaries), and the Notes
thereunder
6. Credit Agreement, dated as of August $271.5 million $285 million
21, 1996, amended, relating to the
$275 million Motorola Guaranteed
Credit Facility, and the Notes
thereunder
</TABLE>
Schedule IV
<PAGE> 102
- 2 -
<TABLE>
<S> <C> <C>
7. Existing Secured Credit Agreement, $550 million $1 Billion
and the Credit Document referred to
therein
8. MOU Agreements Unspecified Unspecified
9. Motorola Guaranteed Credit $0 (exclusive of any $750,000,000
Agreement borrowing concurrently
with a borrowing hereunder).
10. This Agreement and the other Credit $0 $800,000,000
Documents (other than the Motorola
Agreements)
11. Principal Project Documents Unspecified Unspecified
</TABLE>
Schedule IV
<PAGE> 103
EXHIBIT A
[Form of Motorola Guarantee Agreement]
GUARANTEE AGREEMENT
GUARANTEE AGREEMENT dated as of December 23, 1998 between:
MOTOROLA, INC., a corporation duly organized and validly existing under the laws
of the State of Delaware (the "Guarantor"); and THE CHASE MANHATTAN BANK, as
agent for the lenders or other financial institutions or entities party, as
lenders, to the Senior Guaranteed Credit Agreement referred to below (in such
capacity, together with its successors in such capacity, the "Administrative
Agent").
Iridium Operating LLC, a Delaware limited liability company (the
"Company"), certain lenders (each, a "Lender and, collectively, the "Lenders"),
Chase Securities Inc. and Barclays Bank PLC ("Barclays Capital"), as Global Lead
Arrangers (collectively, the "Global Lead Arrangers"), the Administrative Agent
and Barclays Bank PLC, as Documentation Agent, are parties to the Credit
Agreement (as defined below), providing, subject to the terms and conditions
thereof, for loans to be made by the Lenders to the Company in an original
aggregate principal amount not exceeding $750,000,000.
To induce the Lenders to enter into the Credit Agreement and to
extend credit thereunder, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Guarantor has
agreed to guarantee the Guaranteed Obligations (as hereinafter defined),
subject, however, to the limitation set forth in Section 2.09 hereof.
Accordingly, the parties hereto agree as follows:
Section 1. Definitions and Accounting Matters.
1.01 Certain Defined Terms. As used herein, the following terms
shall have the following meanings (all terms defined in Section 1.01 or in other
provisions of this Agreement to have the same meanings when used in the plural
and vice versa):
"Attributable Debt" shall mean, as to any particular lease
under which any Person is at the time liable, at any date as of which
the amount thereof is to be determined, the total net amount of rent
required to be paid by such Person under such lease during the remaining
term thereof, discounted from the respective due dates thereof to such
date at the rate per annum borne by the Senior Securities under, and as
defined in, the Indenture dated as of October 1, 1991 between the
Guarantor and Harris Trust and Savings Bank, as trustee (as such
indenture shall be amended and supplemented from time to time),
compounded annually. The net amount of rent required to be paid under
any such lease for any such period shall be the aggregate amount of the
rent payable by the lessee with respect to such period after excluding
amounts required to be paid on account of maintenance and repairs,
insurance, taxes, assessments, water rates and similar charges. In the
case of any lease which is terminable by the lessee upon the payment of
a
Motorola Guarantee Agreement
<PAGE> 104
- 2 -
penalty, such net amount shall also include the amount of such penalty,
but no rent shall be considered as required to be paid under such lease
subsequent to the first date upon which it may be so terminated.
"Business Day" shall have the meaning assigned to such
term in the Credit Agreement.
"Capital Lease Obligations" shall mean, for any Person,
all obligations of such Person to pay rent or other amounts under a
lease of (or other agreement conveying the right to use) Property to the
extent such obligations are required to be classified and accounted for
as a capital lease on a balance sheet of such Person under GAAP, and,
for purposes of this Agreement, the amount of such obligations shall be
the capitalized amount thereof, determined in accordance with GAAP.
"Commitment" shall have the meaning assigned to such term
in the Credit Agreement.
"Consolidated Net Tangible Assets" shall mean the
aggregate amount of assets (less applicable reserves and other properly
deductible items) after deducting therefrom (a) all current liabilities
(excluding any constituting Funded Debt by reason of their being
renewable or extendible) and (b) all goodwill, trade names, trademarks,
patents, unamortized debt discount and expense and other like
intangibles, all as set forth on the most recent balance sheet of the
Guarantor and its consolidated Subsidiaries and computed in accordance
with generally accepted accounting principles.
"Credit Agreement" shall mean the Senior Guaranteed Credit
Agreement dated as of December 23, 1998 among the Company, the Lenders,
the Global Lead Arrangers, the Administrative Agent and Barclays Bank
PLC, as Documentation Agent, as executed and delivered by the parties
thereto and in effect on the date hereof and as thereafter modified or
supplemented and in effect from time to time (subject to the consent of
the Guarantor to any such modification or supplement as provided in
Section 2.10 hereof and Section 11.04 of the Credit Agreement).
"Debt" shall mean Indebtedness evidenced by notes, bonds,
debentures or similar evidences of indebtedness for borrowed money.
"Dollars" and "$" shall mean lawful money of the United
States of America.
"Environmental Laws" shall mean any and all present and
future U.S. Federal, state, local and foreign laws, rules or
regulations, and any orders or decrees, in each case as now or hereafter
in effect, relating to the regulation or protection of the environment
or to emissions, discharges, releases or threatened releases of
pollutants, contaminants, chemicals or toxic or hazardous substances or
wastes into the indoor or outdoor environment, including, without
limitation, ambient air, soil, surface water, ground water, wetlands,
land or subsurface strata, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport
or
Motorola Guarantee Agreement
<PAGE> 105
- 3 -
handling of pollutants, contaminants, chemicals or toxic or hazardous
substances or wastes.
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended from time to time.
"ERISA Affiliate" shall mean any corporation or trade or
business that is a member of any group of organizations (i) described in
Section 414(b) or (c) of the U.S. Tax Code of which the Guarantor is a
member and (ii) solely for purposes of potential liability under Section
302(c)(11) of ERISA and Section 412(c)(11) of the U.S. Tax Code and the
lien created under Section 302(f) of ERISA and Section 412(n) of the
U.S. Tax Code, described in Section 414(m) or (o) of the U.S. Tax Code
of which the Guarantor is a member.
"Event of Default" shall have the meaning assigned to such
term in the Credit Agreement.
"Funded Debt" shall mean all Debt having a maturity of
more than 12 months from the date of the most recent balance sheet of
the Guarantor and its consolidated Subsidiaries or having a maturity of
less than 12 months but by its terms being renewable or extendible
beyond 12 months from the date of such balance sheet at the option of
the borrower.
"GAAP" shall mean generally accepted accounting principles
applied on a basis consistent with those that, in accordance with the
last sentence of Section 1.02(a) hereof, are to be used in making the
calculations for purposes of determining compliance with this Agreement.
"Governmental Authority" shall mean any nation or
government, any state, province, territory or other political
subdivision thereof, any central bank or other equivalent entity and any
other agency, body, department, bureau, authority, instrumentality or
other entity exercising executive, legislative, judicial, regulatory,
monetary, taxing or administrative functions of or pertaining to
government.
"Guarantee" shall mean a guarantee, an endorsement, a
contingent agreement to purchase or to furnish funds for the payment or
maintenance of, or otherwise to be or become contingently liable under
or with respect to, the Indebtedness, other obligations, net worth,
working capital or earnings of any Person, or a guarantee of the payment
of dividends or other distributions upon the stock or equity interests
of any Person, or an agreement to purchase, sell or lease (as lessee or
lessor) Property, products, materials, supplies or services primarily
for the purpose of enabling a debtor to make payment of such debtor's
obligations or an agreement to assure a creditor against loss, and
including, without limitation, causing a bank or other financial
institution to issue a letter of credit or other similar instrument for
the benefit of another Person, but excluding endorsements for collection
or deposit in the ordinary course of business. The terms "Guarantee" and
"Guaranteed" used as a verb shall have a correlative meaning.
Motorola Guarantee Agreement
<PAGE> 106
- 4 -
"Guaranteed Obligations" shall have the meaning assigned
to such term in Section 2.01 hereof.
"Guarantor Material Adverse Effect" shall mean a material
adverse effect on (a) the financial condition of the Guarantor and its
Subsidiaries taken as a whole or (b) the validity or enforceability of
this Agreement.
"Indebtedness" shall mean, for any Person: (a) obligations
created, issued or incurred by such Person for borrowed money (whether
by loan, the issuance and sale of debt securities or the sale of
Property to another Person subject to an understanding or agreement,
contingent or otherwise, to repurchase such Property from such Person);
(b) obligations of such Person to pay the deferred purchase or
acquisition price of Property or services, other than trade accounts
payable (other than for borrowed money) arising, and accrued expenses
incurred, in the ordinary course of business; (c) Indebtedness of others
secured by a Lien on the Property of such Person, whether or not the
respective indebtedness so secured has been assumed by such Person; (d)
obligations of such Person in respect of letters of credit or similar
instruments issued or accepted by banks and other financial institutions
for account of such Person (other than import letters of credit and
import banker's acceptances arising in the ordinary course of such
Person's business); (e) Capital Lease Obligations of such Person; and
(f) Indebtedness of others Guaranteed by such Person.
"Lien" shall mean, with respect to any Property, any
mortgage, lien, pledge, charge, security interest or encumbrance of any
kind in respect of such Property. For purposes of this Agreement, a
Person shall be deemed to own subject to a Lien any Property that it has
acquired or holds subject to the interest of a vendor or lessor under
any conditional sale agreement, capital lease or other title retention
agreement (other than an operating lease) relating to such Property.
"Loans" shall have the meaning assigned to such term in
the Credit Agreement.
"Majority Lenders" shall have the meaning assigned to such
term in the Credit Agreement.
"Material Motorola Domestic Subsidiary" shall mean, at any
time, any Motorola Domestic Subsidiary that as of such time meets the
definition of a "significant subsidiary" contained as of the date hereof
in Regulation S-X of the SEC.
"Motorola Default" shall mean any Event of Default under
clauses (f) through (n) of Section 9 of the Credit Agreement (but, in
the case of clauses (g) and (h) thereof, only with respect to the
Guarantor or any of the Motorola Domestic Subsidiaries) or any event
which with notice or lapse of time or both would become such an Event of
Default.
"Motorola Domestic Subsidiary" shall mean any Subsidiary
of the Guarantor, except any such Subsidiary (a) that neither transacts
any substantial business
Motorola Guarantee Agreement
<PAGE> 107
- 5 -
nor regularly maintains any substantial portion of its fixed assets
within the United States of America or (b) which is engaged primarily in
financing operations of the Guarantor or its Subsidiaries outside the
United States of America.
"Multiemployer Plan" shall mean a multiemployer plan
defined as such in Section 3(37) of ERISA to which contributions have
been made by the Guarantor or any ERISA Affiliate and that is covered by
Title IV of ERISA.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
or any entity succeeding to any or all of its functions under ERISA.
"Person" shall mean any individual, corporation, company,
voluntary association, partnership, limited liability company, joint
venture, trust, unincorporated organization or Governmental Authority.
"Plan" shall mean an employee benefit or other plan
established or maintained by the Guarantor or any ERISA Affiliate and
that is covered by Title IV of ERISA, other than a Multiemployer Plan.
"Principal Property" shall mean any single parcel of real
estate, manufacturing plant or warehouse owned or leased by the
Guarantor or any Motorola Domestic Subsidiary which is located within
the United States of America and the gross book value (without deduction
of any depreciation reserves) of which on the date as of which the
determination is being made exceeds 1% of Consolidated Net Tangible
Assets, other than any such manufacturing plant or warehouse or portion
thereof (a) which is a pollution control or other facility financed by
obligations issued by a State or local government unit and described in
Section 141(a), 142(a)(5), 142(a)(6) or 144(a) of the U.S. Tax Code, or
any successor provision thereof, or (b) which, in the opinion of the
board of directors of the Guarantor or any duly authorized committee
thereof, is not of material importance to the total business conducted
by the Guarantor and its Subsidiaries as an entirety.
"Property" shall mean any right or interest in or to
property of any kind whatsoever, whether real, personal or mixed and
whether tangible or intangible.
"SEC" shall mean the Securities and Exchange Commission or
any Governmental Authority succeeding to its principal functions.
"Subsidiary" shall mean, with respect to any Person, any
corporation, partnership, limited liability company or other entity of
which at least a majority of the securities or other ownership interests
having by the terms thereof ordinary voting power to elect a majority of
the board of directors or other persons performing similar functions of
such corporation, partnership, limited liability company or other entity
(irrespective of whether or not at the time securities or other
ownership interests of any other class or classes of such corporation,
partnership, limited liability company or other entity shall have or
might have voting power by reason of the happening of any contingency)
is at the time directly or indirectly owned or controlled by such Person
or one or more
Motorola Guarantee Agreement
<PAGE> 108
- 6 -
Subsidiaries of such Person or by such Person and one or more
Subsidiaries of such Person. Notwithstanding the foregoing, in no event
shall Iridium LLC be a Subsidiary of the Guarantor.
"U.S. Tax Code" shall mean the Internal Revenue Code of
1986, as amended from time to time.
1.02 Accounting Terms and Determinations.
(a) Except as otherwise expressly provided herein, all accounting
terms used herein shall be interpreted, and all financial statements and
certificates and reports as to financial matters required to be delivered to the
Administrative Agent hereunder shall (unless otherwise disclosed to the
Administrative Agent in writing at the time of delivery thereof in the manner
described in subsection (b) below) be prepared, in accordance with generally
accepted accounting principles applied on a basis consistent with those used in
the preparation of the latest financial statements furnished to the
Administrative Agent hereunder (which, prior to the delivery of the first
financial statements under Section 4.01 hereof, shall mean the audited financial
statements as at December 31, 1997 referred to in Section 3.02 hereof). All
calculations made for the purposes of determining compliance with this Agreement
shall (except as otherwise expressly provided herein) be made by application of
generally accepted accounting principles applied on a basis consistent with
those used in the preparation of the latest annual or quarterly financial
statements furnished to the Administrative Agent pursuant to Section 4.01 hereof
(or, prior to the delivery of the first financial statements under Section 4.01
hereof, used in the preparation of the audited financial statements as at
December 31, 1997 referred to in Section 3.02 hereof) unless (i) the Guarantor
shall have objected to determining such compliance on such basis at the time of
delivery of such financial statements or (ii) the Majority Lenders shall so
object in writing within 30 days after delivery of such financial statements, in
either of which events such calculations shall be made on a basis consistent
with those used in the preparation of the latest financial statements as to
which such objection shall not have been made (which, if objection is made in
respect of the first financial statements delivered under Section 4.01 hereof,
shall mean the audited financial statements referred to in Section 3.02 hereof).
(b) The Guarantor shall deliver to the Administrative Agent (for
distribution to the Lenders) at the same time as the delivery of any annual or
quarterly financial statement under Section 4.01 hereof (i) a description in
reasonable detail of any material variation between the application of
accounting principles employed in the preparation of such statement and the
application of accounting principles employed in the preparation of the next
preceding annual or quarterly financial statements as to which no objection has
been made in accordance with the last sentence of subsection (a) above and (ii)
reasonable estimates of the difference between such statements arising as a
consequence thereof.
Section 2. The Guarantee.
2.01 The Guarantee. The Guarantor hereby guarantees to each
Lender and the Administrative Agent and their respective successors and assigns
the prompt payment in full when due (whether at stated maturity, by acceleration
or otherwise) of the principal of and
Motorola Guarantee Agreement
<PAGE> 109
- 7 -
interest on the Loans made by the Lenders to the Company and all other amounts
from time to time owing to the Lenders or the Administrative Agent by the
Company under the Credit Agreement and promissory notes issued thereunder
strictly in accordance with the terms thereof (such obligations being herein
collectively called the "Guaranteed Obligations"). In the case of any extension
of time of payment or renewal of any of the Guaranteed Obligations, the same
will be promptly paid in full when due (whether at extended maturity, by
acceleration or otherwise) in accordance with the terms of such extension or
renewal. The Guarantor hereby further agrees that if the Company shall fail to
pay in full when due (whether at stated or extended maturity, by acceleration or
otherwise) any of the Guaranteed Obligations, the Guarantor will pay the same
(a) with respect to any amount due by acceleration under the Credit Agreement
(other than in the case of an automatic acceleration with respect to clause (g)
or (h) of Section 9 of the Credit Agreement), within three Business Days after
the effective date of the relevant notice of acceleration as provided in clause
(x) of the proviso at the end of Section 9 of the Credit Agreement (unless such
acceleration shall have been rescinded prior to the expiration of such three
Business Days) and (b) otherwise, within five Business Days after written demand
by the Administrative Agent to the Guarantor for the relevant amount then due in
respect of the Guaranteed Obligations is received by the Guarantor (unless
payment thereof shall have been made prior to the expiration of such five
Business Days); provided that (i) if for any reason the Administrative Agent
shall be precluded from giving a notice of acceleration under Section 9 of the
Credit Agreement or making a written demand hereunder against the Guarantor,
then the Guarantor shall automatically (without any notice or other action) be
obligated hereunder to pay the relevant amount then due in respect of the
Guaranteed Obligations within ten days after the due date thereof (unless
payment thereof shall have been made or, in the event the Loans shall have been
accelerated, such acceleration shall have been rescinded prior to the expiration
of such ten days) and (ii) the Administrative Agent agrees that, for purposes of
clause (a) above, (x) it will provide the Guarantor with a copy of each notice
of acceleration under clause (1) of Section 9 of the Credit Agreement and (y)
any acceleration under the Credit Agreement pursuant to such notice shall not be
effective for purposes of this Agreement until three Business Days after such
notice shall have been received by each of the Guarantor and the Company (and
such acceleration shall be deemed rescinded if, prior to such third Business
Day, the relevant amount, if any, then due in respect of the Guaranteed
Obligations (other than as a result of such acceleration) shall be paid in full
and all other Events of Default then existing shall have been cured).
2.02 Obligations Unconditional. The obligations of the Guarantor
under Section 2.01 hereof are absolute and unconditional irrespective of the
value, genuineness, validity, regularity or enforceability of the Credit
Agreement or any other agreement or instrument referred to herein or therein, or
any substitution, release or exchange of any other guarantee of or security for
any of the Guaranteed Obligations, and, to the fullest extent permitted by
applicable law, irrespective of any other circumstance whatsoever that might
otherwise constitute a legal or equitable discharge or defense of a surety or
guarantor, it being the intent of this Section 2.02 that the obligations of the
Guarantor hereunder shall be absolute and unconditional under any and all
circumstances. The Guarantor hereby expressly waives diligence, presentment,
demand of payment, protest and all notices whatsoever (other than the demand, if
any, required under Section 2.01 hereof), and any requirement that the
Administrative Agent or any Lender exhaust any right, power or remedy or proceed
against the Company under
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the Credit Agreement or any other agreement or instrument referred to herein or
therein, or against any other Person under any other guarantee of, or security
for, any of the Guaranteed Obligations.
2.03 Reinstatement. The obligations of the Guarantor under this
Section 2 shall be automatically reinstated if and to the extent that for any
reason any payment by or on behalf of the Company in respect of the Guaranteed
Obligations is rescinded or must be otherwise restored by any holder of any of
the Guaranteed Obligations, whether as a result of any proceedings in bankruptcy
or reorganization or otherwise, and the Guarantor agrees that it will indemnify
the Administrative Agent and each Lender on demand for all reasonable costs and
expenses (including, without limitation, fees of counsel) incurred by the
Administrative Agent or such Lender in connection with such rescission or
restoration, including any such costs and expenses incurred in defending against
any claim alleging that such payment constituted a preference, fraudulent
transfer or similar payment under any bankruptcy, insolvency or similar law.
2.04 Subrogation. Until (but only until) payment in full of the
Guaranteed Obligations and expiration or termination of the Commitments, the
Guarantor hereby agrees not to exercise any right or remedy arising by reason of
its performance of its obligations under this Section 2, whether by subrogation
or otherwise, against the Company or any security for any of the Guaranteed
Obligations; provided that, notwithstanding the foregoing, the Guarantor shall
be permitted to commence judicial proceedings against the Company to the extent
(but only to the extent) necessary to avoid being barred by any relevant statute
of limitations from pursuing any such right or remedy against the Company and
thereafter shall take only such action in connection with such proceeding as
shall be reasonably necessary to preserve such right or remedy.
2.05 Remedies. The Guarantor agrees that, as between the
Guarantor and the Lenders, the obligations of the Company under the Credit
Agreement may be declared to be forthwith due and payable as provided in Section
9 of the Credit Agreement (and shall be deemed to have become automatically due
and payable in the circumstances provided in said Section 9) for purposes of
Section 2.01 hereof notwithstanding any stay, injunction or other prohibition
preventing such declaration (or such obligations from becoming automatically due
and payable) as against the Company and that, in the event of such declaration
(or such obligations being deemed to have become automatically due and payable),
such obligations (whether or not due and payable by the Company) shall forthwith
become due and payable by the Guarantor for purposes of said Section 2.01.
2.06 Instrument for the Payment of Money. The Guarantor hereby
acknowledges that the guarantee in this Section 2 constitutes an instrument for
the payment of money, and consents and agrees that any Lender or the
Administrative Agent, at its sole option, in the event of a dispute by the
Guarantor in the payment of any moneys due hereunder, shall have the right to
bring motion-action under New York CPLR Section 3213.
2.07 Continuing Guarantee. The guarantee in this Section 2 is a
continuing guarantee, and shall apply to all Guaranteed Obligations whenever
arising.
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2.08 Notices of Default. The Administrative Agent agrees that,
simultaneously with its delivery to the Company of any notice of Default (as
such term is defined in the Credit Agreement), it will furnish the Guarantor
with a copy of such notice; provided that any failure to provide, or any delay
in providing, any such notice to the Guarantor shall not affect in any manner
the obligations of the Guarantor under this Agreement (subject to Section 2.09
hereof).
2.09 Limitation on Guarantor's Liability. Notwithstanding
anything to the contrary in this Agreement, the maximum aggregate amount payable
by the Guarantor hereunder in respect of the Guaranteed Obligations (whether in
respect of principal of or interest on the Loans or any other amounts payable by
the Company under the Credit Agreement) shall be equal to the lesser of (a)
$750,000,000 and (b) the sum of (i) the aggregate unused amount, if any, of the
Commitments in effect from time to time plus (ii) the aggregate principal amount
of the Loans outstanding under the Credit Agreement at such time; provided that
(A) nothing herein shall limit in any way the obligations of the Guarantor under
Section 5.03 hereof and (B) it is expressly understood and agreed that the
Guaranteed Obligations may from time to time exceed the liability of the
Guarantor hereunder without impairing the obligations of the Guarantor
hereunder.
2.10 Modifications to the Credit Agreement. The Administrative
Agent agrees that any provision of the Credit Agreement may be modified,
supplemented or waived only as provided in Section 11.04 of the Credit
Agreement, and any such modification, supplement or waiver effected without the
prior written consent of the Guarantor shall not be effective against the
Guarantor.
Section 3. Representations and Warranties. The Guarantor
represents and warrants to the Lenders and the Administrative Agent that:
3.01 Corporate Existence. The Guarantor and each Material
Motorola Domestic Subsidiary: (a) is a corporation, partnership or other entity
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization; (b) has all requisite corporate or other
power, and has all material governmental licenses, authorizations, consents and
approvals necessary, to own its assets and carry on its business as now being or
as proposed to be conducted with, in the case of the Material Motorola Domestic
Subsidiaries only, such exceptions as are not reasonably likely (either
individually or in the aggregate) to have a Guarantor Material Adverse Effect;
and (c) is qualified to do business and is in good standing in all jurisdictions
in which the nature of the business conducted by it makes such qualification
necessary and where failure so to qualify could reasonably be likely to (either
individually or in the aggregate) have a Guarantor Material Adverse Effect.
3.02 Financial Condition. The Guarantor has heretofore furnished
to each of the Lenders the consolidated balance sheet of the Guarantor and its
consolidated Subsidiaries as at December 31, 1997 and the related statements of
consolidated earnings, stockholders' equity and cash flows of the Guarantor and
its consolidated Subsidiaries for the fiscal year ended on said date, with the
opinion thereon of KPMG Peat Marwick LLP, and the unaudited consolidated balance
sheet of the Guarantor and its Subsidiaries as at the end of the third fiscal
quarter of the Guarantor's 1998 fiscal year and the related statements of
consolidated earnings, stockholders' equity and cash flows of the Guarantor and
its consolidated Subsidiaries for the nine-month
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period ended on such date. All such financial statements present fairly, in all
material respects, the financial condition of the Guarantor and its consolidated
Subsidiaries as at said dates and the results of their operations for the fiscal
year and nine-month period ended on said dates (subject, in the case of such
financial statements as at the end of such nine-month period to normal year-end
audit adjustments), all in conformity with generally accepted accounting
principles. Since December 31, 1997, there has been no material adverse change
in the consolidated business, operations or financial condition taken as a whole
of the Guarantor and its consolidated Subsidiaries from that set forth in said
financial statements as at said date.
3.03 Litigation. Except as disclosed in the Guarantor's Report on
Form 10-K filed with the SEC for the fiscal year ended December 31, 1997 or in
the Guarantor's Reports on Form 10-Q filed with the SEC for the first, second
and third fiscal quarters of the Guarantor's 1998 fiscal year, each of which has
been delivered to the Lenders prior to the date hereof, there are no legal or
arbitral proceedings, or any proceedings by or before any governmental or
regulatory authority or agency, now pending or (to the knowledge of the
Guarantor) threatened against the Guarantor or any of its Subsidiaries that, if
adversely determined (either individually or in the aggregate), could reasonably
be expected to have a Guarantor Material Adverse Effect.
3.04 No Breach. None of the execution and delivery of this
Agreement, the consummation of the transactions herein contemplated or
compliance with the terms and provisions hereof will conflict with or result in
a breach of, or require any consent under, the charter or by-laws of the
Guarantor, or any applicable law or regulation, or any agreement or instrument
to which the Guarantor or any of the Material Motorola Domestic Subsidiaries is
a party, or by which any of them or any of their Property is bound or to which
any of them is subject, or constitute a default under any such agreement or
instrument.
3.05 Action. The Guarantor has all necessary corporate power,
authority and legal right to execute, deliver and perform its obligations under
this Agreement; the execution, delivery and performance by the Guarantor of this
Agreement have been duly authorized by all necessary corporate action on its
part; and this Agreement has been duly and validly executed and delivered by the
Guarantor and constitutes its legal, valid and binding obligation, enforceable
against it in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws of
general applicability affecting the enforcement of creditors' rights.
3.06 Approvals. No authorizations, approvals or consents of, and
no filings or registrations with, any governmental or regulatory authority or
agency, or any securities exchange, are necessary for the execution, delivery or
performance by the Guarantor of this Agreement or for the legality, validity or
enforceability hereof.
3.07 ERISA. Each of the Guarantor and the ERISA Affiliates of the
Guarantor has fulfilled its obligations under the minimum funding standards of
ERISA and the U.S. Tax Code with respect to each Plan of the Guarantor and is in
compliance in all material respects with the presently applicable provisions of
ERISA and the U.S. Tax Code with respect to each such Plan, and has no existing
liability (other than to make PBGC premium payments and Plan funding payments as
they fall due) to the PBGC or any Plan or Multi-Employer Plan of the Guarantor.
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3.08 Taxes. The Guarantor and the Motorola Domestic Subsidiaries
have filed all Federal income tax returns and all other material tax returns
that are required to be filed by them and have paid all taxes due pursuant to
such returns or pursuant to any assessment received by the Guarantor or any of
the Motorola Domestic Subsidiaries, except for any such tax being contested in
good faith and by proper proceedings and against which adequate reserves are
being maintained. The charges, accruals and reserves on the books of the
Guarantor and the Motorola Domestic Subsidiaries in respect of taxes and other
governmental charges are, in the opinion of the Guarantor, adequate.
3.09 Investment Company Act. Neither the Guarantor nor any of its
Subsidiaries is an "investment company", or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended.
3.10 Public Utility Holding Company Act. Neither the Guarantor
nor any of its Subsidiaries is a "holding company", or an "affiliate" of a
"holding company" or a "subsidiary company" of a "holding company", within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
3.11 Environmental Matters. Each of the Guarantor and the
Material Motorola Domestic Subsidiaries has obtained all environmental, health
and safety permits, licenses and other authorizations required under all
Environmental Laws to carry on its business as now being or as proposed to be
conducted, except to the extent failure to have any such permit, license or
authorization could not reasonably be expected (either individually or in the
aggregate) to have a Guarantor Material Adverse Effect.
3.12 Year 2000. Substantially all programming required to handle
all material dates and date processing (but only to the extent that such
handling would otherwise be impaired by the occurrence of the year 2000), in and
following the year 2000, of the Guarantor's and each of the Material Motorola
Domestic Subsidiaries' (i) computer systems and (ii) equipment containing
embedded microchips, and the testing of all such systems and equipment, as so
reprogrammed, will be substantially completed by July 1, 1999. The expected cost
to the Guarantor and the Material Motorola Domestic Subsidiaries of such
reprogramming and testing and of the reasonably foreseeable consequences of year
2000 to the Guarantor and the Material Motorola Domestic Subsidiaries is not
anticipated to have a Guarantor Material Adverse Effect.
Section 4. Covenants of the Guarantor. The Guarantor covenants
and agrees with the Lenders and the Administrative Agent that, until the payment
and satisfaction in full of the Guaranteed Obligations and the expiration or
termination of the Commitments of the Lenders under the Credit Agreement:
4.01 Financial Statements, Etc. The Guarantor shall deliver to
the Administrative Agent:
(a) as soon as available and in any event within 60 days
after the end of each of the first three quarterly fiscal periods of
each fiscal year of the Guarantor, statements of consolidated earnings,
stockholders' equity and cash flows of the Guarantor and its
consolidated Subsidiaries for such period and for the period from the
beginning of
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the respective fiscal year to the end of such period, and the related
consolidated balance sheet of the Guarantor and its consolidated
Subsidiaries as at the end of such period, setting forth in each case in
comparative form the corresponding figures for the corresponding periods
in the preceding fiscal year (except that, in the case of such balance
sheet, such comparison shall be to the last day of the prior fiscal
year), accompanied by a certificate of a senior financial officer of the
Guarantor, which certificate shall state that said financial statements
present fairly, in all material respects, the financial condition and
results of operations of the Guarantor and its consolidated
Subsidiaries, in each case in conformity with generally accepted
accounting principles as at the end of, and for, such period (subject to
normal year-end audit adjustments) (it being understood that delivery to
the Lenders of the Guarantor's Report on Form 10-Q filed with the SEC
shall satisfy the requirements of this Section 4.01(a) so long as the
information required to be contained in such Report is substantially the
same as that required under this clause (a));
(b) as soon as available and in any event within 120 days
after the end of each fiscal year of the Guarantor, statements of
consolidated earnings, stockholders' equity and cash flows of the
Guarantor and its consolidated Subsidiaries for such fiscal year and the
related consolidated balance sheet of the Guarantor and its consolidated
Subsidiaries as at the end of such fiscal year, setting forth in each
case in comparative form the corresponding figures for the preceding
fiscal year, and accompanied by an opinion thereon of KPMG Peat Marwick
LLP, which opinion shall state that said financial statements present
fairly, in all material respects, the financial condition and results of
operations of the Guarantor and its consolidated Subsidiaries as at the
end of, and for, such fiscal year in conformity with generally accepted
accounting principles (it being understood that delivery to the Lenders
of the Guarantor's Report on Form 10-K filed with the SEC shall satisfy
the requirements of this Section 4.01(b) so long as the information
required to be contained in such Report is substantially the same as
that required under this clause (b));
(c) promptly upon their becoming available, copies of all
registration statements and regular periodic reports on Forms 10-K, 10-Q
and 8-K that the Guarantor shall have filed with the SEC (to the extent
not already delivered to the Lenders pursuant to clauses (a) and (b)
above);
(d) promptly upon the mailing thereof to the shareholders
of the Guarantor generally, copies of all financial statements, reports
and proxy statements so mailed;
(e) promptly after the Guarantor knows or has reason to
believe that any Motorola Default has occurred, a notice of such
Motorola Default (and stating that such notice is a "Notice of Motorola
Default") describing the same in reasonable detail and, together with
such notice or as soon thereafter as possible, a description of the
action that the Guarantor has taken or proposes to take with respect
thereto; and
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(f) from time to time such other information regarding the
condition, financial or otherwise, of the Guarantor or any of its
Subsidiaries as any Lender (through the Administrative Agent) or the
Administrative Agent may reasonably request.
The Guarantor will furnish to the Administrative Agent, at the
time it furnishes each set of financial statements pursuant to clause (a) or (b)
above, a certificate of a senior financial officer of the Guarantor to the
effect that no Motorola Default has occurred and is continuing (or, if any
Motorola Default has occurred and is continuing, describing the same in
reasonable detail and describing the action that the Guarantor has taken or
proposes to take with respect thereto). At the same time as the Guarantor
furnishes any financial statement, notice or other information to the
Administrative Agent under this Section 4.01, it shall provide a sufficient
number of copies thereof for distribution by the Administrative Agent to each of
the Lenders, and upon receipt of the same the Administrative Agent shall
promptly deliver to each of the Lenders a copy of each such financial statement,
notice or other information.
4.02 Existence, Etc. The Guarantor will, and will cause each of
the Material Motorola Domestic Subsidiaries to:
(a) preserve and maintain its legal existence and all of
its material rights, privileges, licenses and franchises (provided that
nothing in this Section 4.02 shall prohibit any transaction expressly
permitted under Section 4.04 hereof);
(b) comply with the requirements of all applicable laws,
rules, regulations and orders of governmental or regulatory authorities
if failure to comply with such requirements is reasonably likely (either
individually or in the aggregate) to have a Guarantor Material Adverse
Effect;
(c) pay and discharge all taxes, assessments and
governmental charges or levies imposed on it or on its income or profits
or on any of its Property prior to the date on which penalties attach
thereto, except for any such tax, assessment, charge or levy the payment
of which is being contested in good faith and by proper proceedings and
against which, in the opinion of the Guarantor, adequate reserves are
being maintained;
(d) maintain all of its Properties used or useful in its
business in good working order and condition, ordinary wear and tear
excepted, provided that nothing in this Section 4.02(d) shall prevent
the Guarantor or any of the Material Motorola Domestic Subsidiaries from
discontinuing such maintenance if such discontinuance is, in the
judgment of the Guarantor or such Material Motorola Domestic Subsidiary,
desirable in the conduct of its business and the business of any of the
Material Motorola Domestic Subsidiaries and not disadvantageous in any
material respect to the Lenders; and
(e) subject to U.S. Government restrictions, permit
representatives of any Lender or the Administrative Agent, during normal
business hours and upon reasonable notice, to examine or inspect any of
its Properties, and to discuss its business and affairs with its
officers, all to the extent reasonably requested by such Lender or the
Administrative Agent (as the case may be) so long as any such
examination or inspection
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shall not unreasonably interfere with the operations of the Guarantor
and the Material Motorola Domestic Subsidiaries.
4.03 Insurance. The Guarantor will, and will cause each of the
Material Motorola Domestic Subsidiaries to, maintain insurance with financially
sound and reputable insurance companies (or through self-insurance programs so
long as such self-insurance is administered in accordance with sound business
practices), and with respect to Property and risks of a character usually
maintained by corporations engaged in the same or similar business similarly
situated, against loss, damage and liability of the kinds and in the amounts
customarily maintained by such corporations.
4.04 Prohibition of Fundamental Changes.
(a) The Guarantor shall not consolidate with or merge into any
other Person or convey, transfer or lease its Property substantially as an
entirety to any Person, and the Guarantor shall not permit any Person to
consolidate with or merge into the Guarantor or convey, transfer or lease its
Property substantially as an entirety to the Guarantor, unless:
(i) in case the Guarantor shall consolidate with or merge into
another Person or convey, transfer or lease its Property substantially
as an entirety to any Person, the Person formed by such consolidation or
into which the Guarantor is merged or the Person which acquires by
conveyance or transfer, or which leases, the Property of the Guarantor
substantially as an entirety shall be a corporation, partnership,
limited liability company or trust, shall be organized and validly
existing under the laws of the United States of America, any State
thereof or the District of Columbia and shall expressly assume, by an
instrument in writing, executed and delivered to the Administrative
Agent in form satisfactory to the Majority Lenders, the due and punctual
payment of the Guaranteed Obligations and all other amounts payable by
the Guarantor to the Administrative Agent and the Lenders hereunder and
the performance or observance of every covenant of this Agreement on the
part of the Guarantor to be performed or observed;
(ii) immediately after giving effect to such transaction and
treating any Indebtedness which becomes an obligation of the Guarantor
or any Subsidiary of the Guarantor or any other successor Person as a
result of such transaction as having been incurred by the Guarantor or
such Subsidiary or such successor Person at the time of such
transaction, no Motorola Default shall have happened and be continuing;
(iii) if, as a result of any such consolidation or merger or such
conveyance, transfer or lease, Property of the Guarantor would become
subject to a Lien which would not be permitted by this Agreement, the
Guarantor or such successor Person, as the case may be, shall take such
steps as shall be necessary effectively to secure the payment of the
Guaranteed Obligations and all other amounts payable by the Guarantor to
the Administrative Agent and the Lenders hereunder equally and ratably
with (or prior to) all Debt secured thereby; and
(iv) the Guarantor has delivered to the Administrative Agent a
certificate of a senior officer of the Guarantor and a written opinion
of counsel (who may be counsel to
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the Guarantor and who shall be acceptable to the Majority Lenders), each
stating that such consolidation, merger, conveyance, transfer or lease
and all conditions precedent herein provided for relating to such
transaction have been complied with.
(b) Upon any consolidation of the Guarantor with, or merger of
the Guarantor into any other Person or any conveyance, transfer or lease of the
Property of the Guarantor substantially as an entirety in accordance with clause
(i) of paragraph (a) above, the successor Person formed by such consolidation or
into which the Guarantor is merged or to which such conveyance, transfer or
lease is made shall succeed to, and be substituted for, and may exercise every
right and power of, the Guarantor under this Agreement with the same effect as
if such successor Person had been named as the Guarantor herein, and thereafter,
except in the case of a lease, the predecessor Person shall be relieved of all
obligations and covenants under this Agreement.
4.05 Limitation on Liens. The Guarantor will not itself, and will
not permit any Motorola Domestic Subsidiary to, incur, issue, assume, or
guarantee any Debt secured by any Lien on any Principal Property of the
Guarantor or any Motorola Domestic Subsidiary, or any shares of stock of or Debt
of any Motorola Domestic Subsidiary without effectively providing that all
amounts payable by the Guarantor to the Administrative Agent and the Lenders
hereunder (together with, if the Guarantor shall so determine, any other Debt of
the Guarantor or such Motorola Domestic Subsidiary then existing or thereafter
created which is not subordinate to the payment of the Guaranteed Obligations
and all other amounts payable by the Guarantor to the Administrative Agent and
the Lenders hereunder) shall be secured equally and ratably with (or prior to)
such secured Debt, so long as such secured Debt shall be so secured, unless,
after giving effect thereto, the aggregate amount of all such secured Debt plus
all Attributable Debt of the Guarantor and the Motorola Domestic Subsidiaries in
respect of Sale and Leaseback Transactions (as defined in Section 4.06 hereof)
would not exceed 5% of the Consolidated Net Tangible Assets; provided, however,
that this Section 4.05 shall not apply to, and there shall be excluded from
secured Debt in any computation under this Section, Debt secured by:
(a) Liens on Property (including any shares of stock or
Debt) of any Person which are existing at the time such Person becomes a
Motorola Domestic Subsidiary or at the time it is merged into or
consolidated with the Guarantor or any Motorola Domestic Subsidiary;
(b) Liens in favor of the Guarantor or any Motorola
Domestic Subsidiary;
(c) Liens in favor of any governmental body to secure
progress, advance or other payments pursuant to any contract or
provision of any statute;
(d) Liens on Property (including shares of stock or Debt)
existing at the time of acquisition thereof (including acquisition
through merger or consolidation);
(e) Liens on Property (including shares of stock or Debt)
to secure the payment of all or any part of the purchase price or
construction cost thereof or to secure any Debt incurred prior to, at
the time of, or within 180 days after, the acquisition of such
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Property, the completion of any construction or the commencement of full
operation, for the purpose of financing all or any part of the purchase
price or construction cost thereof;
(f) Liens on shares of capital stock of Space Systems
License, Inc.; and
(g) any extension, renewal or replacement (or successive
extensions, renewals or replacements), as a whole or in part, of any
Lien referred to in the foregoing clauses (a) to (f), inclusive;
provided that such extension, renewal or replacement Lien shall be
limited to all or a part of the same Property secured by the Lien
extended, renewed or replaced (plus improvements on such Property).
4.06 Limitation on Sales and Leasebacks. The Guarantor will not
itself, and it will not permit any Motorola Domestic Subsidiary to, enter into
any arrangement with any bank, insurance company or other lender or investor
(not including the Guarantor or any Motorola Domestic Subsidiary) or to which
any such lender or investor is a party, providing for the leasing by the
Guarantor or a Motorola Domestic Subsidiary for a period, including renewals, in
excess of three years of any Principal Property which has been or is to be sold
or transferred, more than 180 days after the completion of construction and
commencement of full operation thereof, by the Guarantor or such Motorola
Domestic Subsidiary to such lender or investor or to any Person to whom funds
have been or are to be advanced by such lender or investor on the security of
such Principal Property (herein referred to as a "Sale and Leaseback
Transaction") unless either:
(a) the Guarantor or such Motorola Domestic Subsidiary
could create Debt secured by a Lien pursuant to Section 4.05 on the
Principal Property to be leased in an amount equal to the Attributable
Debt with respect to such Sale and Leaseback Transaction without equally
and ratably securing the payment of the Guaranteed Obligations and all
other amounts payable by the Guarantor to the Administrative Agent and
the Lenders hereunder, or
(b) the Guarantor, within 120 days after the sale or
transfer shall have been made by the Guarantor or by a Motorola Domestic
Subsidiary, applies an amount not less than the greater of (i) the net
proceeds of the sale of the Principal Property leased pursuant to such
arrangement or (ii) the fair market value of the Principal Property so
leased at the time of entering into such arrangement (as determined by
any two of the following: the Chairman of the Board of the Guarantor,
its Vice Chairman of the Board, its President, any elected Vice
President of the Guarantor and its Treasurer) to the retirement of
Funded Debt of the Guarantor; provided that the amount to be applied to
the retirement of Funded Debt of the Guarantor shall be reduced by the
principal amount of Funded Debt voluntarily retired by the Guarantor
within 120 days after such sale. Notwithstanding the foregoing, no
retirement referred to in this clause (b) may be effected by payment at
maturity or pursuant to any mandatory sinking fund payment or any
mandatory prepayment provision.
4.07 Certain Undertakings Relating to the Credit Agreement. The
Guarantor hereby acknowledges and agrees that, as provided in Section 6.03 of
the Credit Agreement, each notice of borrowing given by the Company under the
Credit Agreement shall constitute a certification by the Guarantor to the effect
set forth in clauses (c) and (d) of the first sentence of
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said Section 6.03, both as of the date of such notice and, unless the Guarantor
otherwise notifies the Administrative Agent prior to the date of such borrowing,
as of the date of such borrowing, and that the Administrative Agent and the
Lenders are entitled to rely (without further inquiry of the Guarantor or
otherwise) on each such notice of borrowing (and such certification of the
Guarantor deemed to be made therein) as if such certification were given to the
Administrative Agent directly in writing by the Guarantor in connection with
such borrowing.
Section 5. Miscellaneous.
5.01 No Waiver. No failure on the part of the Administrative
Agent or any Lender to exercise, and no course of dealing with respect to, and
no delay in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise by the Administrative
Agent or any Lender of any right, power or remedy hereunder preclude any other
or further exercise thereof or the exercise of any other right, power or remedy.
The remedies herein are cumulative and are not exclusive of any remedies
provided by law.
5.02 Notices. All notices, requests, consents and demands
hereunder shall be in writing and telecopied or delivered to the intended
recipient (i) in the case of the Guarantor, at the "Address for Notices"
specified beneath its name on the signature pages hereof or (ii) in the case of
the Administrative Agent, at the address specified in Section 11.02 of the
Credit Agreement; or, as to either party, at such other address as shall be
designated by such party in a notice to the other party. Except as otherwise
provided in this Agreement, all such communications shall be deemed to have been
duly given when transmitted by telecopier or personally delivered or, in the
case of a mailed notice, upon receipt, in each case given or addressed as
aforesaid.
5.03 Expenses. The Guarantor agrees to reimburse each of the
Lenders and the Administrative Agent for all reasonable out-of-pocket costs and
expenses of the Lenders and the Administrative Agent (including, without
limitation, the reasonable fees and expenses of legal counsel) in connection
with (a) any default by the Guarantor in the performance of any of its
obligations hereunder and any enforcement or collection proceeding resulting
therefrom, including, without limitation, all manner of participation in or
other involvement with (i) bankruptcy, insolvency, receivership, foreclosure,
winding up or liquidation proceedings, (ii) judicial or regulatory proceedings
and (iii) workout, restructuring or other negotiations or proceedings (whether
or not the workout, restructuring or transaction contemplated thereby is
consummated) and (b) the enforcement of this Section 5.03.
5.04 Amendments, Etc. The terms of this Agreement may be waived,
altered or amended only by an instrument in writing duly executed by the
Guarantor and the Administrative Agent (with the consent of the Lenders as
specified in Section 10.09 of the Credit Agreement). Any such amendment or
waiver shall be binding upon the Administrative Agent and each Lender, each
holder of any of the Guaranteed Obligations and the Guarantor.
5.05 Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the respective successors and assigns of the
Guarantor, the Administrative Agent, the Lenders and each holder of any of the
Guaranteed Obligations (provided, however, that the Guarantor shall not assign
or transfer any of its rights or obligations hereunder without the prior
Motorola Guarantee Agreement
<PAGE> 120
- 18 -
written consent of the Administrative Agent (acting with the consent of the
Lenders as specified in Section 10.09 of the Credit Agreement)).
5.06 Captions. The captions and section headings appearing herein
are included solely for convenience of reference and are not intended to affect
the interpretation of any provision of this Agreement.
5.07 Counterparts. This Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one and the same
instrument and either of the parties hereto may execute this Agreement by
signing any such counterpart.
5.08 Governing Law; Submission to Jurisdiction. This Agreement
shall be governed by, and construed in accordance with, the law of the State of
New York. The Guarantor hereby submits to the nonexclusive jurisdiction of the
United States District Court for the Southern District of New York and of the
Supreme Court of the State of New York sitting in New York County (including its
Appellate Division), and of any other appellate court in the State of New York,
for the purposes of all legal proceedings arising out of or relating to this
Agreement or the transactions contemplated hereby. The Guarantor hereby
irrevocably waives, to the fullest extent permitted by applicable law, any
objection that it may now or hereafter have to the laying of the venue of any
such proceeding brought in such a court and any claim that any such proceeding
brought in such a court has been brought in an inconvenient forum.
5.09 Waiver of Jury Trial. EACH OF THE GUARANTOR AND THE
ADMINISTRATIVE AGENT (ON BEHALF OF ITSELF AND THE LENDERS) HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
5.10 Agents and Attorneys-in-Fact. The Administrative Agent may
employ agents and attorneys-in-fact in connection herewith and shall not be
responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it in good faith.
5.11 Severability. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(a) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in favor of the Administrative
Agent and the Lenders in order to carry out the intentions of the parties hereto
as nearly as may be possible and (b) the invalidity or unenforceability of any
provision hereof in any jurisdiction shall not affect the validity or
enforceability of such provision in any other jurisdiction.
5.12 Treatment of Certain Information; Confidentiality.
(a) The Guarantor acknowledges that from time to time financial
advisory, investment banking and other services may be offered or provided to
the Guarantor or one or more of its Subsidiaries (in connection with this
Agreement or otherwise) by any Lender or by one or more subsidiaries or
affiliates of such Lender. The Guarantor hereby agrees that, in the
Motorola Guarantee Agreement
<PAGE> 121
- 19 -
event any such services are provided to the Guarantor or any of its
Subsidiaries, each Lender providing such services is authorized to share any
information delivered to such Lender by the Guarantor and its Subsidiaries
pursuant to this Agreement, or in connection with the decision of such Lender to
enter into the Credit Agreement, to any such subsidiary or affiliate providing
such services, provided that any such subsidiary or affiliate receiving such
information agrees to be bound by the provisions of paragraph (b) below as if it
were a Lender. Such authorization shall survive the repayment of the Loans and
the termination of the Commitments.
(b) By accepting the benefits of this Agreement, each Lender,
each Agent and each Global Lead Arranger agrees (on behalf of itself and each of
its affiliates, directors, officers, employees and representatives) to restrict
dissemination of any Confidential Information (as defined below) only to those
of its directors, officers, employees and representatives who are involved in
the evaluation of such information, and to use reasonable precautions to keep
such information confidential, in accordance with its customary procedures for
handling confidential information of the same nature and in accordance with safe
and sound banking practices. For purposes of this Agreement, "Confidential
Information" shall mean any non-public information supplied to it by the
Guarantor pursuant to this Agreement, that is identified (in writing, in the
case of written information) by the Guarantor as being confidential at the time
the same is delivered to the Lenders, the Agents or the Global Lead Arrangers,
provided that nothing herein shall limit the disclosure of any such information
by any Lender, Agent or Global Lead Arranger (i) after such information shall
have become public (other than through a violation of this Section 5.12 by such
Lender, Agent or Global Lead Arranger), (ii) to the extent required by statute,
rule, regulation or judicial process, (iii) to counsel or other experts for any
of the Lenders, Agents or Global Lead Arrangers, provided that such counsel or
experts shall be bound by the requirements of this Section 5.12(b) with respect
to any such information, (iv) to bank examiners (or any other regulatory
authority having jurisdiction over any Lender, Agent or Global Lead Arranger),
or to auditors or accountants, (v) to any Global Lead Arranger, any Agent or any
other Lender (or to any of their respective affiliates), provided that any such
disclosure to any such affiliate shall be made on a "need to know" basis only
for use by such affiliate (and each of its officers, directors and employees)
solely in connection with the transactions contemplated by this Agreement and
each such affiliate (and each of its officers, directors and employees) shall
agree (for the benefit of the Guarantor) to be bound to keep such information
confidential on the same terms as set forth in this Section 5.12), (vi) in
connection with any litigation to which any one or more of the Lenders, the
Global Lead Arrangers or the Agents is a party, or in connection with the
enforcement of rights or remedies hereunder or under any other Credit Document,
provided that the party intending to make such disclosure shall use reasonable
efforts to cooperate with the Guarantor to reasonably minimize the extent of any
such disclosure or to obtain confidential treatment of information to be
disclosed, (vii) to a subsidiary or affiliate of such Lender as provided in
paragraph (a) above or (viii) to any assignee or participant (or prospective
assignee or participant) so long as such assignee or participant (or prospective
assignee or participant) first executes and delivers to the respective Lender,
the Guarantor and the Company a confidentiality agreement containing
substantially the same provisions as those in this Section 5.12 (or executes and
delivers to such Lender, the Guarantor and the Company an acknowledgement to the
effect that it is bound by the provisions of this Section 5.12(b)); provided,
further, that in no event shall any Lender, Agent or Global Lead Arranger be
obligated or required to return any materials furnished by the Guarantor
hereunder
Motorola Guarantee Agreement
<PAGE> 122
- 20 -
except to the extent it has agreed to do so in writing in conjunction with the
receipt of such information. The obligations of any assignee that has executed a
confidentiality agreement as provided above shall be superseded by this Section
5.12 with respect to the matters covered hereby on the date upon which such
assignee becomes a Lender pursuant to Section 11.06(b) of the Credit Agreement.
Motorola Guarantee Agreement
<PAGE> 123
- 21 -
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered as of the day and year first above written.
GUARANTOR
MOTOROLA, INC.
By
------------------------
Name:
Title:
Address for Notices:
Motorola, Inc.
Corporate Offices
1303 East Algonquin Road
Schaumburg, Illinois 60196
Attention: Treasurer
Telecopier No.: 847-576-4768
Telephone No.: 847-576-4994
with copies to:
Motorola, Inc.
Corporate Offices
1303 East Algonquin Road
Schaumburg, Illinois 60196
Attention: Corporate Secretary
Telecopier No.: 847-576-2818
Telephone No.: 847-576-5008
and
Motorola, Inc.
2501 S. Price Road
Chandler, AZ 85248
Attention: Vice President - Law Department,
Iridium Matters
Telecopier No.: 602-732-3188
Telephone No.: 602-732-3187
Motorola Guarantee Agreement
<PAGE> 124
- 22 -
ADMINISTRATIVE AGENT
THE CHASE MANHATTAN BANK,
as Administrative Agent
By
------------------------
Name:
Title:
Motorola Guarantee Agreement
<PAGE> 125
EXHIBIT B
[Form of Opinion of Counsel to the Company]
December 23, 1998
To: The Chase Manhattan Bank,
As Administrative Agent
Chase Securities Inc.,
As a Global Lead Arranger
and Joint Book Manager
Barclays Bank PLC,
As a Global Lead Arranger
and Joint Book Manager and
as Documentation Agent
And the Lenders signatory to
the Credit Agreement,
c/o The Chase Manhattan Bank
270 Park Avenue
New York, New York 10017.
Ladies and Gentlemen:
We have acted as counsel to Iridium Operating LLC, a Delaware
limited liability company (the "Company"), in connection with the Senior
Guaranteed Credit Agreement (the "Credit Agreement"), dated as of December 23,
1998, among the Company and you. Capitalized terms used herein which are not
otherwise defined have the meanings assigned to such terms in the Credit
Agreement. This opinion is being delivered to you pursuant to Section 6.01(e) of
the Credit Agreement.
In our capacity as counsel to the Company, we have examined such
corporate records, certificates and other documents, and such questions of law,
as we have considered necessary or appropriate for purposes of this opinion.
Upon the basis of such examination, it is our opinion that:
(1) The Company is a limited liability company duly formed,
validly existing and in good standing under the laws of the State of
Delaware.
(2) Each of the Credit Agreement and each promissory note of the
Company issued on the date hereof to the Lenders set forth on Annex A
(collectively with the
Opinion of Special New York Counsel to the Company
<PAGE> 126
The Chase Manhattan Bank
Chase Securities Inc.
Barclays Bank PLC
And the Lenders signatory
to the Credit Agreement - 2 -
Credit Agreement, the "Loan Documents") has been duly authorized,
executed and delivered and constitutes the valid and legally binding
obligation of the Company enforceable in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles.
(3) All regulatory consents, authorizations, approvals and
filings required to be obtained or made by the Company under the Federal
laws of the United States and the State of New York for the execution
and delivery to you of the Loan Documents, and for the borrowing by the
Company from the Lenders under the Credit Agreement, have been obtained
or made.
(4) The execution and delivery by the Company of the Loan
Documents does not, and the performance by the Company of its
obligations under the Loan Documents will not,
(a) violate the Limited Liability Company Agreement of
Iridium Operating LLC, dated December 18, 1997, entered into by
Iridium LLC,
(b) result in a default under or breach of, require any
consent under, or result in the acceleration or required
prepayment of any indebtedness pursuant to the terms of, or
result in the creation or imposition of any Lien upon any
Property of the Company pursuant to the terms of, any of the
agreements listed in Annex B to this opinion,
(c) violate any arbitral award, order, writ, injunction or
decree of any court or governmental authority of the United
States or any state thereof of which we have knowledge, or
(d) violate any Federal law of the United States or law of
the State of New York applicable to the Company;
provided, however, that, for the purposes of this paragraph (4), we
express no opinion with respect to Federal or state securities laws,
other antifraud laws, fraudulent transfer laws, laws governing the
solicitation of deposits and the Employee Retirement Income Security Act
of 1974 and related laws; provided, further, that insofar as performance
by the Company of its obligations under the Loan Documents is concerned,
we express no opinion as to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights[, or as to the Securities Act
of 1933, as amended, or the securities or blue sky laws of the various
states].
Opinion of Special New York Counsel to the Company
<PAGE> 127
The Chase Manhattan Bank
Chase Securities Inc.
Barclays Bank PLC
And the Lenders signatory
to the Credit Agreement - 3 -
(5) To the best of our knowledge, and other than as set forth in
Schedule II to the Credit Agreement, there are no legal, governmental or
arbitral proceedings in the United States or any state thereof pending
to which the Company is a party or of which any property of the Company
is the subject which could reasonably be likely to have a Material
Adverse Effect.
(6) The Company is not an "investment company" or an entity
"controlled" by a company registered as an "investment company", as such
terms are defined in the Investment Company Act of 1940, as amended.
(7) The Company is not a "holding company", or an "affiliate" of
a company registered as a "holding company" or a "subsidiary company" of
a company registered as a "holding company", as such terms are defined
in the Public Utility Holding Company Act of 1935, as amended.
In connection with our opinion in paragraph (2) above, we express
no opinion regarding (i) the enforceability of Section 11.03 of the Credit
Agreement as it may be limited by laws limiting the enforceability of provisions
exculpating or exempting a party from, or requiring indemnification of a party
for, liability for its own action or inaction, to the extent the action or
inaction involves gross negligence, recklessness, willful misconduct or unlawful
conduct, (ii) Section 4.07(c) of the Credit Agreement, (iii) the second sentence
of Section 11.10 of the Credit Agreement, insofar as such sentence relates to
the subject matter jurisdiction of the United States District Court for the
Southern District of New York to adjudicate any controversy related to the Loan
Documents or any transaction contemplated thereby, (iv) the waiver of
inconvenient forum set forth in Section 11.10 of the Credit Agreement (and any
similar provisions in any of the other Documents) with respect to proceedings in
the United States District Court for the Southern District of New York, and (v)
the enforceability of provisions in the Credit Agreement to the effect that
terms may not be waived or modified except in writing which may be limited under
certain circumstances. We express no opinion as to the effect of any Federal or
state communications law, including, without limitation, the Communications Act
of 1934, as amended. In addition, we express no opinion as to the effect of the
laws of any jurisdiction in which any Lender is located (other than the State of
New York) that limit the interest, fees or other charges such Lender may impose
for the loan or use of money or other credit.
The foregoing opinion is limited to the Federal laws of the
United States, the laws of the State of New York and the Delaware Limited
Liability Company Act and we are expressing no opinion as to the effect of the
laws of any other jurisdiction.
With your approval, we have relied as to certain factual matters
on information obtained from public officials, officers of the Company and other
sources believed by us to be
Opinion of Special New York Counsel to the Company
<PAGE> 128
The Chase Manhattan Bank
Chase Securities Inc.
Barclays Bank PLC
And the Lenders signatory
to the Credit Agreement - 4 -
responsible, and we have assumed that the Credit Agreement has been duly
authorized, executed and delivered by all parties thereto, other than the
Company, and that the signatures on all documents examined by us are genuine,
assumptions which we have not independently verified.
This letter is provided to you by us in our capacity as counsel
for the Company, and the opinions contained in this letter may not be relied
upon by any Person other than you and any of your assignees pursuant to Section
11.06 of the Credit Agreement or by any Person for any purpose other than in
connection with the transactions contemplated by the Credit Agreement without,
in each instance, our prior written consent.
Very truly yours,
Opinion of Special New York Counsel to the Company
<PAGE> 129
Annex A
[Lenders to which the notes were issued]
Promissory Notes
Payable to Principal Amount
---------- ----------------
Opinion of Special New York Counsel to the Company
<PAGE> 130
Annex B
Space System Contract between Iridium LLC and Motorola, Inc. effective July 29,
1993, as amended and conformed on September 12, 1995 and Amendment No. 6
thereto, dated as of August 16, 1996
Operations & Maintenance Contract between Iridium LLC and Motorola, Inc.
effective July 29, 1993, as amended and conformed on September 12, 1995 and
Amendment No. 6 thereto, dated as of August 16, 1996
Terrestrial Network Development Contract between Iridium LLC and Motorola, Inc.
effective January 1, 1993, as amended and conformed on March 25, 1996 and
Amendment No. 2 thereto, dated as of August 16, 1996
14 1/2% Senior Subordinated Discount Notes Due 2006 of the Company
Second Amended and Restated Agreement Regarding Guarantee among Iridium LLC, the
Company and Motorola, Inc. dated as of December 23, 1998
Third Amended and Restated Memorandum of Understanding among the Company,
Motorola, Inc. and Iridium LLC, dated as of December 23, 1998
Management Services Agreement among the Company, Iridium LLC and Iridium World
Communications Ltd., as amended and restated on December 18, 1997
Senior Secured Credit Agreement among the Company, Chase Securities Inc.,
Barclays Bank PLC, The Chase Manhattan Bank as Administrative Agent, Barclays
Bank PLC as Documentation Agent and the Lenders thereunder, dated December 23,
1998
Indenture among Iridium LLC, Capital, Roaming, IP and State Street Bank and
Trust Company, as Trustee (the "Trustee"), providing for the issuance of up to
$300,000,000 aggregate principal amount of 13% Senior Notes Due 2005, dated as
of July 16, 1997 (the "Series A Note Indenture")
First Series A Note Supplemental Indenture made by and among Iridium LLC, the
Company, Capital, Roaming, IP and the Trustee, dated as of December 18, 1997,
supplementing the Series A Note Indenture
Second Series A Note Supplemental Indenture made by and among Facilities, the
Company, Capital and the Trustee, dated as of February 27, 1998, supplementing
the Series A Note Indenture
Indenture among Iridium LLC, Capital, Roaming, IP and the Trustee, providing for
the issuance of up to $500,000,000 aggregate principal amount of 14% Senior
Notes Due 2005, Series B, dated as of July 16, 1997 (the "Series B Note
Indenture")
Opinion of Special New York Counsel to the Company
<PAGE> 131
The Chase Manhattan Bank
Chase Securities Inc.
Barclays Bank PLC
And the Lenders signatory
to the Credit Agreement - 2 -
First Series B Note Supplemental Indenture made by and among Iridium LLC, the
Company, Capital, Roaming, IP and the Trustee, dated as of December 18, 1997,
supplementing the Series B Note Indenture
Second Series B Note Supplemental Indenture made by and among Facilities, the
Company, Capital and the Trustee, dated as of February 27, 1998, supplementing
the Series B Note Indenture
Indenture among Iridium LLC, Capital, Roaming, IP and the Trustee, providing for
the issuance of up to $300,000,000 aggregate principal amount of 11 1/4% Senior
Notes Due 2005, Series C, dated as of July 16, 1997 (the "Series C Note
Indenture")
First Series C Note Supplemental Indenture made by and among Iridium LLC, the
Company, Capital, Roaming, IP and the Trustee, dated as of December 18, 1997,
supplementing the Series C Note Indenture
Second Series C Note Supplemental Indenture made by and among Facilities, the
Company, Capital and the Trustee, dated as of February 27, 1998, supplementing
the Series C Note Indenture
Indenture among the Company, Capital, Roaming, IP, Facilities and the Trustee
providing for the issuance of up to $350,000,000 aggregate principal amount of
[__%] Senior Notes Due 2005, Series D, dated as of May 13, 1998
Opinion of Special New York Counsel to the Company
<PAGE> 132
EXHIBIT C-1
[Form of Opinion of Corporate Counsel of Motorola]
December 23, 1998
To: The Lenders party to the
Credit Agreement referred to
below
Chase Securities Inc. and
Barclays Bank PLC, as
Global Lead Arrangers,
The Chase Manhattan Bank, as
Administrative Agent, and
Barclays Bank PLC, as
Documentation Agent
Ladies and Gentlemen:
I am a [Title] of Motorola, Inc., a Delaware corporation
("Motorola") and have acted as counsel to Motorola in connection with the
Guarantee Agreement (the "Motorola Guarantee Agreement") dated as of December
23, 1998 between Motorola and The Chase Manhattan Bank, as Administrative Agent
for the lenders party to the Credit Agreement (as defined therein), providing
for loans to be made by said lenders to Iridium Operating LLC, a Delaware
limited liability company (the "Company"), in an aggregate original principal
amount not to exceed $750,000,000. Terms defined in the Motorola Guarantee
Agreement are used herein as defined therein. This opinion is being delivered
pursuant to Section 6.01(f) of the Credit Agreement.
In rendering the opinions expressed below, I have examined the
Motorola Guarantee Agreement and such corporate records of Motorola and such
other documents as I have deemed necessary as a basis for the opinions expressed
below.
In my examination, I have assumed the genuineness of all
signatures, the authenticity of all documents submitted to me as originals and
the conformity with authentic original documents of all documents submitted to
me as copies. When relevant facts were not independently established, I have
relied upon statements of governmental officials and upon representations made
in or pursuant to the Motorola Guarantee Agreement and certificates of
appropriate representatives of Motorola.
In rendering the opinions expressed below, I have assumed, with
respect to all of the documents referred to in this opinion letter, that
(except, to the extent set forth in the opinions expressed below, as to
Motorola):
Opinion of Corporate Counsel of Motorola
<PAGE> 133
- 2 -
(i) such documents have been duly authorized by,
have been duly executed and delivered by, and constitute
legal, valid, binding and enforceable obligations of, all
of the parties to such documents;
(ii) all signatories to such documents have been
duly authorized; and
(iii) all of the parties to such documents are duly
organized and validly existing and have the power and
authority (corporate or other) to execute, deliver and
perform such documents.
Based upon and subject to the foregoing and subject also to the
comments and qualifications set forth below, and having considered such
questions of law as I have deemed necessary as a basis for the opinions
expressed below, I am of the opinion that:
1. Motorola is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.
2. Motorola has all requisite corporate power to execute
and deliver, and to perform its obligations under, the Motorola
Guarantee Agreement.
3. The execution, delivery and performance by Motorola of
the Motorola Guarantee Agreement have been duly authorized by all
necessary corporate action on the part of Motorola.
4. The Motorola Guarantee Agreement has been duly executed
and delivered by Motorola.
5. No authorization, approval or consent of, and no filing
or registration with, any governmental or regulatory authority or agency
of the United States of America or the State of Illinois is required on
the part of Motorola for the execution, delivery or performance by it of
the Motorola Guarantee Agreement.
6. The execution, delivery and performance by Motorola of,
and the consummation by Motorola of the transactions contemplated by,
the Motorola Guarantee Agreement do not and will not (a) violate any
provision of its charter or by-laws, (b) violate any applicable law,
rule or regulation, (c) violate any order, writ, injunction or decree of
any court or governmental authority or agency or any arbitral award of
which I have knowledge (after reasonable inquiry) applicable to Motorola
or any of the Material Motorola Domestic Subsidiaries or (d) result in a
breach of, constitute a default under, require any consent under, or
result in the acceleration or required prepayment of any indebtedness
pursuant to the terms of, any agreement or instrument of which I have
knowledge (after reasonable inquiry) to which Motorola or any of the
Material Motorola Domestic Subsidiaries is a party or by which any of
them is bound or to which any of them is subject, or result in the
creation or imposition of any Lien upon any Property of Motorola
pursuant to, the terms of any such agreement or instrument.
Opinion of Corporate Counsel of Motorola
<PAGE> 134
- 3 -
7. Except as disclosed in Motorola's Report on Form 10-K
filed with the SEC for fiscal year ended December 31, 1997 and in
Motorola's Reports on Form 10-Q filed with the SEC for the first, second
and third fiscal quarters for the fiscal year 1998, I have no knowledge
(after reasonable inquiry) of any legal or arbitral proceedings, or any
proceedings by or before any governmental or regulatory authority or
agency, pending or threatened against or affecting Motorola or any of
Motorola's Subsidiaries or any of their respective Properties that, if
adversely determined, could reasonably be likely to have a Guarantor
Material Adverse Effect.
I have not been asked to provide an opinion, and I therefore
express no opinion, as to the enforceability of provisions in the Motorola
Guarantee Agreement.
The foregoing opinions are limited to matters involving the
Federal laws of the United States of America, the Delaware General Corporation
Law and the law of the State of Illinois, and I do not express any opinion as to
the laws of any other jurisdiction.
At the request of my client, this opinion letter is, pursuant to
Section 6.01(f) of the Credit Agreement, provided to you by me in my capacity as
senior corporate counsel of Motorola and may not be relied upon by any Person
for any purpose other than in connection with the transactions contemplated by
the Credit Agreement and the Motorola Guarantee Agreement without, in each
instance, my prior written consent.
Very truly yours,
Opinion of Corporate Counsel of Motorola
<PAGE> 135
EXHIBIT C-2
[Form of Opinion of Special New York Counsel to Motorola]
December 23, 1998
To: The Lenders party to the
Credit Agreement referred to
below
Chase Securities Inc. and
Barclays Bank PLC, as
Global Lead Arrangers,
The Chase Manhattan Bank, as
Administrative Agent, and
Barclays Bank PLC, as
Documentation Agent
Ladies and Gentlemen:
We are issuing this letter in our capacity as counsel to Motorola, Inc.,
a Delaware corporation (the "Guarantor" or "our Client"), in connection with the
Guarantee Agreement (the "Motorola Guarantee Agreement") dated as of December
23, 1998 between the Guarantor and The Chase Manhattan Bank, as Administrative
Agent for the lenders party to the Credit Agreement (as defined therein),
providing for loans to be made by said lenders to Iridium Operating LLC, a
Delaware limited liability company (the "Company"), in an original aggregate
principal amount not to exceed $750,000,000. Terms defined in the Motorola
Guarantee Agreement are used herein as defined therein. The term "Transaction
Agreements" whenever it is used in this letter means the Motorola Guarantee
Agreement and the Credit Agreement. This letter is being delivered pursuant to
Section 6.01(f) of the Credit Agreement.
Subject to the assumptions, qualifications, exclusions and other limitations
that are identified in this letter and in the schedules attached to this letter,
it is our opinion that:
1. The Motorola Guarantee Agreement constitutes the legal, valid and
binding obligation of the Guarantor, enforceable against it in accordance with
its terms.
2. No authorization, approval or consent of, and no filing or
registration with, any governmental or regulatory authority or agency of the
State of New York is required on the part
Form of Opinion of Special New York Counsel to Motorola
<PAGE> 136
December __, 1998
Page 5
of the Guarantor for the execution, delivery or performance by it of the
Motorola Guarantee Agreement.
3. The execution, delivery and performance by the Guarantor of, and the
consummation by the Guarantor of the transactions contemplated by, the Motorola
Guarantee Agreement do not and will not violate any presently applicable law,
rule or regulation of the State of New York covered by this letter.
4. The Guarantor is not an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.
5. The Guarantor is not a "holding company", or an "affiliate" of a
"holding company" or a "subsidiary company" of a "holding company", within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
Each opinion in this letter is subject to the General Qualifications
that are recited in Schedule A to this letter to the extent relevant to such
opinion.
In preparing this letter we have relied without any independent
verification upon the assumptions recited in Schedule B to this letter and upon:
(i) information contained in certificates obtained from governmental agencies;
(ii) factual information represented to be true in the Transaction Agreements;
and (iii) factual information provided to us by the Guarantor, including without
limitation the information set forth in a Support Certificate executed by the
Guarantor. We have assumed without investigation that there has been no relevant
change or development between the dates as of which the information cited in the
preceding sentence was given and the date of this letter and that the
information upon which we have relied is accurate and does not omit disclosures
necessary to prevent such information from being misleading. We have further
assumed without independent verification each of the matters as to which an
opinion is set forth in the opinion letter of even date herewith of
[____________], [Title] of the Guarantor also counsel to the Guarantor in
connection with the Motorola Guarantee Agreement, delivered to you pursuant to
Section 6.01(f) of the Credit Agreement (as to which matters we understand you
are satisfied).
While we have not conducted any independent investigation to determine
facts upon which our opinions are based, we confirm that we do not have any
actual knowledge which has caused us to conclude that our reliance and
assumptions cited in the preceding paragraph are unwarranted. The term "actual
knowledge" whenever it is used in this letter with respect to our firm means
conscious awareness at the time this letter is delivered on the date it bears by
the following Kirkland & Ellis lawyers who have had significant involvement with
negotiation or preparation of the Transaction Agreements (herein called "our
Designated Transaction Lawyers"): [Andrew M. Kaufman, [others]].
Our advice on every legal issue addressed in this letter is based
exclusively on such internal law of the State of New York or such federal law of
the United States which, in each case, is in our experience normally applicable
to general business corporations not engaged in
Form of Opinion of Special New York Counsel to Motorola
<PAGE> 137
December __, 1998
Page 6
regulated business activities and to transactions of the type contemplated
between the Guarantor and the Administrative Agent in the Motorola Guarantee
Agreement (but without our having made any special investigation as to any other
laws), except that we express no opinion or advice as to any law (i) the
violation of which would not have any material adverse effect on the Guarantor,
(ii) which might be violated by any misrepresentation or omission or a
fraudulent act, or (iii) to which the Guarantor may be subject as a result of
your legal or regulatory status, your sale or transfer of the Guaranteed
Obligations or interests therein or your (as opposed to any other lender's)
involvement in the transactions contemplated by the Transaction Documents. We
advise you that some issues addressed by this letter may be governed in whole or
in part by laws other than those referred to in the previous sentence, but we
express no opinion as to whether any relevant difference exists between the laws
upon which our opinions are based and any other laws which may actually govern.
Our opinions do not cover or otherwise address any law or legal issue which is
identified in the attached Schedule C or any provision in the Motorola Guarantee
Agreement of a kind identified in Schedule D. Provisions in the Motorola
Guarantee Agreement which are not excluded by Schedule D or any other part of
this letter or its attachments are called the "Relevant Agreement Terms."
Our advice on each legal issue addressed in this letter represents our
opinion as to how that issue would be resolved were it to be considered by the
highest court of the jurisdiction upon whose law our opinion on that issue is
based. The manner in which any particular issue would be treated in any actual
court case would depend in part on facts and circumstances particular to the
case, and this letter is not intended to guarantee the outcome of any legal
dispute which may arise in the future.
This letter speaks as of the time of its delivery on the date it bears.
We do not assume any obligation to provide you with any subsequent opinion or
advice by reason of any fact about which our Designated Transaction Lawyers did
not have actual knowledge at that time, by reason of any change subsequent to
that time in any law covered by any of our opinions, or for any other reason.
The attached schedules are an integral part of this letter, and any term defined
in this letter or any schedule has that defined meaning wherever it is used in
this letter or in any schedule to this letter.
This letter is delivered to you in satisfaction of the requirement of
Section 6.01(f) of the Credit Agreement and may be used by you only for that
purpose. Without our written consent: (i) no person other than you (and any
assignees permitted under the Credit Agreement) may rely on this letter for any
purpose; (ii) this letter may not be cited or quoted in any financial statement,
prospectus, private placement memorandum or other similar document; (iii) this
letter may not be cited or quoted in any other document or communication which
might encourage reliance upon this letter by any person or for any purpose
excluded by the restrictions in this paragraph; and (iv) copies of this letter
may not be furnished to anyone for purposes of encouraging such reliance.
Very truly yours,
Form of Opinion of Special New York Counsel to Motorola
<PAGE> 138
SCHEDULE A
GENERAL QUALIFICATIONS
The term "General Qualifications" as used in the letter to which this
Schedule A is attached ("our letter") means the Bankruptcy Exception, the
Equitable Principles Limitation and the Other Common Qualifications set forth in
this Schedule.
Bankruptcy and Insolvency Exception. Each of the opinions ("our
opinions") in our letter is subject to the effect of bankruptcy, insolvency,
reorganization, receivership, moratorium and other similar laws. This exception
includes:
(a) the Federal Bankruptcy Code and thus comprehends, among others,
matters of turn-over, automatic stay, avoiding powers, fraudulent transfer,
preference, discharge, conversion of a non-recourse obligation into a recourse
claim, and limitations on ipso facto and anti-assignment clauses;
(b) all other Federal and state bankruptcy, insolvency, reorganization,
receivership, moratorium, arrangement and assignment for the benefit of
creditors laws that affect the rights of creditors generally or that have
reference to or affect only creditors of specific types of debtors;
(c) state fraudulent transfer and conveyance laws; and
(d) judicially developed doctrines in this area, such as substantive
consolidation of entities and equitable subordination.
Equitable Principles Limitation. Each of our opinions is subject to the
effect of general principles of equity, whether applied by a court of law or
equity. This limitation includes principles:
(a) governing the availability of specific performance, injunctive
relief or other equitable remedies, which generally place the award of such
remedies, subject to certain guidelines, in the discretion of the court to which
application for such relief is made;
(b) affording equitable defenses (e.g., waiver, laches and estoppel)
against a party seeking enforcement;
(c) requiring good faith and fair dealing in the performance and
enforcement of a contract by the party seeking its enforcement;
(d) requiring reasonableness in the performance and, enforcement of an
agreement by the party seeking enforcement of the contract;
(e) requiring consideration of the materiality of (i) a breach and (ii)
the consequences of the breach to the party seeking enforcement;
Schedule A to Form of Opinion of Special New York Counsel to Motorola
<PAGE> 139
(f) requiring consideration of the impracticability or impossibility of
performance at the time of attempted enforcement; and
(g) affording defenses based upon the unconscionability of the enforcing
party's conduct after the parties have entered into the contract.
Other Common Qualifications. Each of our opinions is subject to the
effect of rules of law that:
(a) limit or affect the enforcement of provisions of a contract that
purport to waive, or to require waiver of, the obligations of good faith, fair
dealing, diligence and reasonableness;
(b) provide that forum selection clauses in contracts are not
necessarily binding on the court(s) in the forum selected;
(c) limit the availability of a remedy under certain circumstances where
another remedy has been elected;
(d) provide a time limitation after which a remedy may not be enforced;
(e) limit the right of a creditor to use force or cause a breach of the
peace in enforcing rights;
(f) limit the enforceability of provisions releasing, exculpating or
exempting a party from, or requiring indemnification of a party for, liability
for its own action or inaction, to the extent the action or inaction involves
negligence, recklessness, willful misconduct, unlawful conduct, violation of
public policy or litigation against another party determined adversely to such
party;
(g) may, where less than all of a contract may be unenforceable, limit
the enforceability of the balance of the contract to circumstances in which the
unenforceable portion is not an essential part of the agreed exchange;
(h) govern and afford judicial discretion regarding the determination of
damages and entitlement to attorneys' fees and other costs;
(i) may permit a party that has materially failed to render or offer
performance required by a contract to cure that failure unless (i) permitting a
cure would unreasonably hinder the aggrieved party from making substitute
arrangements for performance, or (ii) it was important in the circumstances to
the aggrieved party that performance occur by the date stated in the contract;
and
(j) may render a guaranty unenforceable under circumstances where a
creditor's actions or failures to act or waivers, amendments or replacement of
the guaranteed obligations or the related transaction agreements so radically
change the essential nature of the terms and conditions of the guaranteed
obligations and the related transactions that, in effect, a new
Schedule A to Form of Opinion of Special New York Counsel to Motorola
<PAGE> 140
relationship has arisen between the creditor and the borrower that is
substantially and materially different from that initially contemplated by such
transaction agreements.
Schedule A to Form of Opinion of Special New York Counsel to Motorola
<PAGE> 141
SCHEDULE B
ASSUMPTIONS
For purposes of the letter to which this Schedule is attached ("our
letter"), we have relied, without investigation, upon each of the following
assumptions:
1. Each natural person who is executing the Motorola Guarantee Agreement
on behalf of our Client has sufficient legal capacity to enter into the Motorola
Guarantee Agreement.
2. The Motorola Guarantee Agreement constitutes valid and binding
obligations of the Administrative Agent and is enforceable against the
Administrative Agent in accordance with its terms (subject to qualifications,
exclusions and other limitations similar to those set forth in our letter).
3. The Administrative Agent has satisfied those legal requirements that
are applicable to it to the extent necessary to make the Motorola Guarantee
Agreement enforceable against it.
4. The Administrative Agent has complied with all legal requirements
pertaining to its status as such status relates to its rights to enforce the
Motorola Guarantee Agreement against our Client.
5. Each document submitted to us for review is accurate and complete,
each such document that is an original is authentic, each such document that is
a copy conforms to an authentic original, and all signatures (other than those
of or on behalf of the Guarantor) on each such document are genuine.
6. Each certificate obtained from a governmental authority relied on by
us is accurate, complete and authentic and all relevant official public records
to which each such certificate relates are accurate and complete.
7. There has not been any mutual mistake of fact, fraud, duress or undue
influence.
8. The conduct of the parties to the transactions effected under the
Transaction Agreements (herein called the "Transactions") has complied with any
requirement of good faith, fair dealing and conscionability.
9. You have acted in good faith and without notice of any defense
against the enforcement of any rights created by the Transaction Agreements.
10. There are no agreements or understandings among the parties to the
Transaction Agreements, written or oral, and there is no usage of trade or
course of prior dealing among such parties that would, in either case, define,
supplement or qualify the terms of the Transaction Agreements.
Schedule B to Form of Opinion of Special New York Counsel to Motorola
<PAGE> 142
11. All statutes, judicial and administrative decisions, and rules and
regulations of governmental agencies, in each of the jurisdictions upon whose
law our opinions are based are generally available (i.e., in terms of access and
distribution following publication or other release) to lawyers practicing in
that jurisdiction, and are in a format that makes legal research reasonably
feasible.
12. The constitutionality or validity of a relevant statute, rule,
regulation or agency action is not in issue.
13. All parties to the Transaction Agreements will act in accordance
with, and will refrain from taking any action that is forbidden by, the terms
and conditions of the Transaction Agreements.
Schedule B to Form of Opinion of Special New York Counsel to Motorola
<PAGE> 143
SCHEDULE C
EXCLUDED LAW AND LEGAL ISSUES
None of the opinions or advice contained in the letter to which this
Schedule is attached (herein called "our letters") covers or otherwise addresses
any of the following legal issues:
1. Federal securities laws and regulations administered by the
Securities and Exchange Commission, state "Blue Sky" laws and regulations, and
laws and regulations relating to commodity (and other) futures and indices and
other similar instruments;
2. Federal Reserve Board margin regulations;
3. pension and employee benefit laws and regulations (e.g., ERISA);
4. Federal and state antitrust and unfair competition laws and
regulations;
5. Federal laws, regulations, directives and executive orders that
prohibit or limit the enforceability of obligations based on attributes of the
party seeking enforcement (e.g., the Trading with the Enemy Act and the
International Emergency Economic Powers Act);
6. Federal and state laws and regulations concerning filing and notice
requirements other than requirements applicable to charter-related documents
such as a certificate of merger;
7. compliance with fiduciary duty requirements;
8. the statues and ordinances, the administrative decisions and the
rules and regulations of counties, towns, municipalities and special political
subdivisions and judicial decisions to the extent that they deal with any of the
foregoing;
9. fraudulent transfer and fraudulent conveyance laws;
10. Federal and state racketeering laws and regulations (e.g., RICO);
11. Federal and state laws, regulations and policies concerning (i)
national and local emergency, (ii) possible judicial deference to acts of
sovereign states, and (iii) criminal and civil forfeiture laws;
12. other Federal and state statutes of general application to the
extent they provide for criminal prosecution (e.g., mail fraud and wire fraud
statutes);
13. the effect of the laws of any jurisdiction in which any Lender is
located (other than the State of New York) that limit the interest, fees or
other charges such Lender may impose; and
14. the effect of any law, regulation or order which hereafter becomes
effective.
Schedule C to Form of Opinion of Special New York Counsel to Motorola
<PAGE> 144
SCHEDULE D
EXCLUDED PROVISIONS
None of the opinions in the letter to which this Schedule is attached
covers or otherwise addresses any of the following kinds of provisions which may
be contained in the Motorola Guarantee Agreement:
1. Provisions providing for forfeitures or the recovery of amounts
deemed to constitute penalties, or for liquidated damages, acceleration of
future amounts due (other than principal) without appropriate discount to
present value, late charges, prepayment charges, and increased interest rates
upon default.
2. Waivers of (i) legal or equitable defenses, (ii) rights to damages,
(iii ) rights to counterclaim or set off, (iv) statutes of limitations, (v)
rights to notice, (vi) the benefits of statutory, regulatory, or constitutional
rights, unless and to the extent the statute, regulation, or constitution
explicitly allows waiver, (vii) broadly or vaguely stated rights, (viii) unknown
future defenses and (ix) other benefits to the extent they cannot be waived
under applicable law.
3. Provisions that provide for the appointment of a receiver.
4. Agreements to submit to the jurisdiction of any particular court or
other governmental authority (either as to personal jurisdiction or subject
matter jurisdiction); provisions restricting access to courts; waiver of service
of process requirements which would otherwise be applicable; and provisions
otherwise purporting to affect the jurisdiction and venue of courts.
5. Provisions which purport to award attorneys' fees solely to one
party.
6. Indemnification for negligence, willful misconduct or other
wrongdoing or strict product liability or any indemnification for liabilities
arising under securities laws.
7. Provisions purporting to limit rights of third parties who have not
consented thereto or purporting to grant rights to third parties.
8. Section [2.06] of the Motorola Guarantee Agreement.
Opinion of Special New York Counsel to Motorola
<PAGE> 145
EXHIBIT D
[Form of Opinion of Special New York Counsel
to the Global Lead Arrangers and the Agents]
December 23, 1998
To: The Lenders party to the
Credit Agreement referred to
below
Chase Securities Inc. and
Barclays Bank PLC, as
Global Lead Arrangers,
The Chase Manhattan Bank, as
Administrative Agent, and
Barclays Bank PLC, as
Documentation Agent
Ladies and Gentlemen:
We have acted as special New York counsel to Chase Securities
Inc. and Barclays Bank PLC (collectively, the "Global Lead Arrangers"), The
Chase Manhattan Bank, as Administrative Agent (in such capacity, the
"Administrative Agent"), and Barclays Bank PLC, as Documentation Agent (in such
capacity, the "Documentation Agent"), in connection with the Senior Guaranteed
Credit Agreement dated as of December 23, 1998 (the "Guaranteed Credit
Agreement") among Iridium Operating LLC, a Delaware limited liability company
(the "Company"), the lenders party thereto, the Global Lead Arrangers, the
Administrative Agent, and the Documentation Agent, providing for loans to be
made by said lenders to the Company in an aggregate original principal amount
not exceeding $750,000,000. Terms defined in the Guaranteed Credit Agreement are
used herein as defined therein. In addition, as used herein, the Company and
Motorola are each referred to herein individually as an "Obligor" and,
collectively, as the "Obligors". This opinion letter is being delivered pursuant
to Section 6.01(g) of the Guaranteed Credit Agreement.
Opinion of Special New York Counsel
to the Global Lead Arrangers and the Agents
<PAGE> 146
- 2 -
In rendering the opinions expressed below, we have examined the
Guaranteed Credit Agreement and the Motorola Guarantee Agreement (collectively
with the Guaranteed Credit Agreement, the "Credit Documents").
In our examination, we have assumed the authenticity of all
documents submitted to us as originals and the conformity with authentic
original documents of all documents submitted to us as copies.
In rendering the opinions expressed below, we have also assumed,
with respect to all of the documents referred to in this opinion letter, that:
(i) such documents have been duly authorized by, have
been duly executed and delivered by, and (except to the extent
expressly set forth in the opinions below as to the Obligors)
constitute legal, valid, binding and enforceable obligations of,
all of the parties to such documents;
(ii) all signatories to such documents have been duly
authorized; and
(iii) all of the parties to such documents are duly
organized and validly existing and have the power and authority
(corporate or other) to execute, deliver and perform such
documents.
Based upon and subject to the foregoing and subject also to the
comments and qualifications set forth below, and having considered such
questions of law as we have deemed necessary as a basis for the opinions
expressed below, we are of the opinion that each of the Credit Documents
constitutes the legal, valid and binding obligation of each Obligor party
thereto, enforceable against such Obligor in accordance with its terms, except
as may be limited by bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance or transfer or other similar laws relating to or affecting
the rights of creditors generally and except as the enforceability of the Credit
Documents is subject to the application of general principles of equity
(regardless of whether considered in a proceeding in equity or at law),
including, without limitation, (a) the possible unavailability of specific
performance, injunctive relief or any other equitable remedy and (b) concepts of
materiality, reasonableness, good faith and fair dealing.
The foregoing opinions are subject to the following comments and
qualifications:
(A) The enforceability of Section 11.03 of the Guaranteed
Credit Agreement may be limited by laws limiting the enforceability of
provisions exculpating or exempting a party, or requiring
indemnification of a party for, liability for its own action or
inaction, to the extent the action or inaction involves gross
negligence, recklessness, willful misconduct or unlawful conduct.
(B) The enforceability of provisions in the Credit
Documents to the effect that terms may not be waived or modified except
in writing may be limited under certain circumstances.
Opinion of Special New York Counsel
to the Global Lead Arrangers and the Agents
<PAGE> 147
- 3 -
(C) We express no opinion as to (i) the effect of the laws
of any jurisdiction in which any Lender is located (other than the State
of New York) that limit the interest, fees or other charges such Lender
may impose, (ii) Section 4.07(c) of the Guaranteed Credit Agreement,
(iii) Section 2.06 of the Motorola Guarantee Agreement and (iv) the
second sentence of Section 11.10 of the Guaranteed Credit Agreement and
the second sentence of Section 5.08 of the Motorola Guarantee Agreement,
insofar as such sentences relate to the subject matter jurisdiction of
the United States District Court for the Southern District of New York
to adjudicate any controversy related to any of the Credit Documents.
The foregoing opinions are limited to matters involving the
Federal laws of the United States and the law of the State of New York, and we
do not express any opinion as to the laws of any other jurisdiction.
At the request of our client, this opinion letter is, pursuant to
Section 6.01(g) of the Guaranteed Credit Agreement, provided to you by us in our
capacity as special New York counsel to the Global Lead Arrangers and may not be
relied upon by any Person for any purpose other than in connection with the
transactions contemplated by the Guaranteed Credit Agreement without, in each
instance, our prior written consent.
Very truly yours,
WJM/RJW
Opinion of Special New York Counsel
to the Global Lead Arrangers and the Agents
<PAGE> 148
EXHIBIT E
[Form of Assignment and Acceptance]
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Senior Guaranteed Credit Agreement dated as of December
23, 1998 (as amended, supplemented or otherwise modified and in effect on date
hereof, the "Credit Agreement") among Iridium Operating LLC, a Delaware limited
liability company, the lenders named therein, the Global Lead Arrangers, The
Chase Manhattan Bank, as administrative agent for such lenders and Barclays Bank
PLC, as documentation agent thereunder. Terms defined in the Credit Agreement
are used herein with the same meanings.
The Assignor named below hereby sells and assigns, without
recourse, to the Assignee named below, and the Assignee hereby purchases and
assumes, without recourse, from the Assignor, effective as of the Assignment
Date set forth below, the interests set forth below (the "Assigned Interest") in
the Assignor's rights and obligations under the Credit Agreement, including,
without limitation, the interests set forth below in the Commitment of the
Assignor on the Assignment Date and Loans owing to the Assignor which are
outstanding on the Assignment Date, together with unpaid interest accrued on the
assigned Loans to the Assignment Date, and the amount, if any, set forth below
of the fees accrued to the Assignment Date for the account of the Assignor. The
Assignee hereby acknowledges receipt of a copy of the Credit Agreement. From and
after the Assignment Date (i) the Assignee shall be a party to and be bound by
the provisions of the Credit Agreement and, to the extent of the interests
assigned by this Assignment and Acceptance, have the rights and obligations of a
Lender thereunder and (ii) the Assignor shall, to the extent of the interests
assigned by this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement.
The Assignor (a) makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement, any other Credit Document or any instrument or document furnished
pursuant thereto, other than that it has not created any adverse claim upon the
interest being assigned by it hereunder and that such interest is free and clear
of any adverse claim; and (b) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Company, Motorola
or any of their respective Subsidiaries or the performance or observance by the
Company, Motorola, any of their respective Subsidiaries or any other obligor of
any of their respective obligations under the Credit Agreement or any other
instrument or document furnished pursuant hereto or thereto.
The Assignee (a) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance; (b) confirms that it
has received such documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this Assignment and
Acceptance; (c) agrees that it will, independently and without reliance upon the
Assignor, the Agents or any other person that has become a Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own
Assignment and Acceptance
<PAGE> 149
- 2 -
credit decisions in taking or not taking action under the Credit Agreement; and
(d) appoints and authorizes the Administrative Agent to take such action as
agent on its behalf and to exercise such powers under the Credit Agreement and
any other Credit Documents to which it is a party as are delegated to the
Administrative Agent by the terms.
This Assignment and Acceptance is being delivered to the
Administrative Agent together with, if the Assignee is not already a Lender
under the Credit Agreement, an administrative questionnaire in the form supplied
by the Administrative Agent, duly completed by the Assignee. The
[Assignee/Assignor] shall pay the fee payable to the Administrative Agent
pursuant to Section 11.04(b) of the Credit Agreement.
This Assignment and Acceptance shall be governed by and construed
in accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment and Acceptance to be executed as of the date first above written by
their respective duly authorized officers on Schedule 1 hereto.
Assignment and Acceptance
<PAGE> 150
- 3 -
Date of Assignment:
Legal Name of Assignor:
Legal Name of Assignee:
Assignee's Address for Notices:
Effective Date of Assignment
("Assignment Date"):
<TABLE>
<CAPTION>
Percentage Assigned of
Facility/Commitment
(set forth, to at
least 8 decimals, as a
percentage of the
Facility and the
aggregate Commitments
Principal Amount of all Lenders
Facility Assigned thereunder
- -------- -------- -----------------------
<S> <C> <C>
Commitment Assigned: $ %
Loans:
Fees Assigned (if any):
The terms set forth above are hereby agreed to as of [_____________]:
</TABLE>
[NAME OF ASSIGNOR], as Assignor
By
-------------------------------
Name:
Title:
[NAME OF ASSIGNEE], as Assignee
By
--------------------------------
Name:
Title:
Assignment and Acceptance
<PAGE> 151
- 4 -
The undersigned hereby consent to the within assignment:(1)
IRIDIUM OPERATING LLC
By
---------------------------
Name:
Title:
THE CHASE MANHATTAN BANK,
as Administrative Agent
By
---------------------------
Name:
Title:
- ------------------
(1) Consents to be included to the extent required by Section 11.04(b) of
the Credit Agreement.
Assignment and Acceptance
<PAGE> 1
EXHIBIT 6
EXECUTION COPY
SECOND AMENDED AND RESTATED
MEMORANDUM OF UNDERSTANDING
This Second Amended and Restated Memorandum of Understanding ("MOU"),
dated as of December 23, 1998, among Motorola, Inc., a Delaware corporation
("Motorola"), Iridium LLC, a Delaware limited liability company ("Iridium") and
Iridium Operating LLC, a Delaware limited liability company and a wholly-owned
subsidiary of Iridium ("Operating"), amends and restates the Amended and
Restated Memorandum of Understanding, dated as of May 11, 1998 among Motorola,
Iridium and Operating (the "First Amended MOU"), which amended the Memorandum of
Understanding originally dated as of July 11, 1997, between Iridium and Motorola
(the "Original MOU").
Reference is made to (i) that certain Guarantee Agreement, dated as of
August 21, 1996, as amended (the "Bridge Guarantee Agreement"), pursuant to
which Motorola has guaranteed the payment of up to $275,000,000 of the
obligations of Operating under that certain Credit Agreement, dated as of August
21, 1996, as amended, between Operating (as successor to Iridium) and the
Lenders named therein (the "Bridge Agreement"), and (ii) the Third Amended and
Restated Agreement Regarding Guarantee, dated as of December 23, 1998, among
Motorola, Iridium and Operating (the "Agreement Regarding Guarantee").
Capitalized terms used herein and not defined herein shall have the
meanings ascribed to them in the Agreement Regarding Guarantee.
On July 16, 1997, Iridium issued (i) $300 million aggregate principal
amount of 13% Senior Notes due 2005, Series A (the "Series A Notes") and (ii)
$500 million aggregate principal amount of 14% Senior Notes due 2005, Series B
(the "Series B Notes"). On October 17, 1997, Iridium issued $300 million
aggregate principal amount of 11.25% Senior Notes due 2005, Series C (the
"Series C Notes" and, together with the Series A Notes and the Series B Notes,
the "Series A, B & C Senior Notes"). Other than their respective interest rates,
the Series A Notes, the Series B Notes and the Series C Notes have substantially
similar terms.
On December 18, 1997 Iridium entered into an asset drop-down
transaction (the "Asset Drop-Down Transaction") with Operating, pursuant to
which substantially all of the assets and liabilities of Iridium were
transferred to Operating, including without limitation the Series A, B & C
Senior Notes and the Bridge Agreement.
Operating has entered into a $1 billion senior secured interim Credit
Agreement, dated as of December 19, 1997, with the banks and other financial
institutions named therein (the "Secured Bank Facility"). In connection with the
execution of the Secured Bank Facility, Motorola, Operating and The Chase
Manhattan Bank (as Administrative Agent and Collateral Agent) entered into that
certain Consent and Agreement (the "Motorola Consent", and for purposes of this
Agreement this term
<PAGE> 2
EXECUTION COPY
shall refer to any amended or new consent and agreement entered into by Motorola
pursuant to Section 6(c)). As of the date hereof, Operating has drawn
approximately $550 million under the Secured Bank Facility.
On May 8, 1998, Operating issued $350 million aggregate principal
amount of 10.875% Senior Notes due 2005, Series D (the "Series D Notes" and,
together with the Series A, B & C Notes, the "Outstanding Senior Notes"). Other
than their respective interest rates, the Series D Notes and the Series A, B & C
Notes have substantially similar terms.
At any time and from time to time, Iridium World Communications Ltd.
("IWCL"), Iridium and Operating, individually or in combination, may issue and
sell (i) additional senior notes of Operating ("Additional Senior Notes" and,
together with the Outstanding Senior Notes, the "Senior Notes"), (ii)
subordinated notes of Operating ("Subordinated Notes"), (iii) Class A Common
Stock of IWCL, (iv) warrants to purchase Class A Common Stock, (v) Class 1
Membership Interests of Iridium LLC, (vi) warrants to purchase Class 1 Interests
and (vii) securities that are combinations (as convertible or exchangeable
securities or otherwise) of the securities and interests listed in (i) though
(vi). The securities and interests listed in (i) through (vi) above are referred
to herein collectively as "Additional Securities".
Operating, Iridium and IWCL intend to raise new funds to finance
Operating's development, construction and operation of the Iridium satellite
communications system (the "Iridium System"), including the refinancing of
Operating's indebtedness under the Secured Bank Facility, through a combination
of one or more funding sources, including the following: (i) an offering or
offerings of Additional Securities, (ii) the up to $475 million Guaranteed
Credit Facility Increase (as defined in Section 2(a)) (which, when taken
together with an amendment to the current Bridge Agreement and Bridge Guarantee
Agreement or the entering into of a separate Credit Agreement as contemplated by
Section 1(d) (either in addition to or as a replacement of the then current
Bridge Agreement), would result in a $750 million Credit Facility guaranteed by
Motorola), (iii) a new secured Credit Agreement or Agreements satisfying at
least the minimum requirements set forth in Section 2(b) (collectively, the
"Permanent Bank Facility") and (iv) the up to $350 million Commitment Increase
(as defined in Section 1(b)). As of the date hereof, the "Permanent Bank
Facility" shall refer to the Senior Secured Credit Agreement dated as of
December 23, 1998 among Operating, Chase Securities Inc. and Barclays Bank PLC,
as Global Lead Arrangers and Joint Book Managers, the Administrative Agent and
Collateral Agent, the Documentation Agent and the Lenders named therein.
The purpose of this MOU is to set forth certain binding agreements
among Motorola, Iridium and Operating that are intended to (i) incorporate the
remaining pertinent terms of the First Amended MOU and (ii) reflect certain
agreements of the parties in respect of (A) the issuance of Additional
Securities, (B) the commitment of
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Motorola to defer its receipt of certain payments owed to it under the IRIDIUM
System Operations and Maintenance Contract between Operating, as successor to
Iridium, and Motorola, dated as of July 29, 1993 as amended (the "O&M
Contract"), (C) the conditional commitment of Motorola to guarantee the payment
of up to an additional $475,000,000 of obligations of Operating (inclusive of
principal, interest and other amounts) under the Bridge Agreement and (D) the
commitment of Motorola (conditional with respect to the following clause (1)) to
permit Operating to use the Guarantee Increase (as defined in Section 1(b)) for
the purpose of (1) obtaining new guaranteed loans under the Bridge Agreement or
another credit agreement or agreements and (2) guaranteeing up to $300 million
of the Permanent Bank Facility.
Section 1. Bridge Agreement - Extension and $350 Million Guarantee
Increase.
(a) Extension Amendment. Subject to Sections 9(e) and 10,
upon the written request of Operating, Motorola will consent to Operating's
entering into an amendment to the Bridge Agreement (the "Extension Amendment")
pursuant to which the following change shall be made to the Bridge Agreement:
the definition of "Commitment Termination Date" with respect to up to $275
million of obligations guaranteed by Motorola under the existing Bridge
Agreement shall be changed to a date (the "Extended Maturity Date") which is
after the maturity of the Outstanding Senior Notes (but not later than December
31, 2005); provided, however, that to the extent that the Commitments under the
Bridge Agreement or loans made thereunder are increased pursuant to Section 1(b)
or Section 2, the maturity of any loans based on such Commitment increases shall
be as set forth in Section 1(b) or Section 2, as the case may be.
(b) Commitment Increase Amendment and Guarantee Increase.
Subject to Sections 1(e), 9(e) and 10 and the satisfaction of the New Guarantee
Condition (as defined in Section 2(b)), upon the written request of Operating
provided prior to October 1, 1999, Motorola will (i) consent to Operating's
entering into an amendment or amendments to the Bridge Agreement (the
"Commitment Increase Amendment") pursuant to which the Commitments under the
Bridge Agreement or loans available thereunder shall be increased by up to $350
million (the "Commitment Increase") and (ii) agree to guarantee up to an
additional $350 million of borrowings of Operating (inclusive of principal,
interest and other amounts) (the "Guarantee Increase") under the Commitment
Increase; provided, however, that Motorola shall not be required to agree to a
Guarantee Increase to the extent any borrowings guaranteed thereby would be
advanced or incurred after October 1, 1999 or have a maturity later than
December 29, 2000. Motorola's obligations to consent to the Commitment Increase
Amendment and to agree to the Guarantee Increase shall expire on October 1,
1999. In consideration for providing the Guarantee Increase, Iridium and
Operating will compensate Motorola pursuant to the Agreement Regarding Guarantee
and, as specified in the Agreement Regarding Guarantee, if Operating incurs any
obligations under a Credit Agreement that are
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guaranteed by the Guarantee Increase (or any part thereof or the Alternative
Guarantee), the entire amount of the Guarantee Increase (including, without
duplication the Alternative Guarantee, if available) that is, or could be, made
available under this MOU shall constitute Motorola Exposure regardless of
whether Operating has arranged for commitments from lenders or incurred
obligations that are subject to such amount.
(c) Certain Guarantee Agreement Amendments. Subject to
Sections 9(e) and 10 and the satisfaction of the New Guarantee Condition,
Motorola will enter into an amendment or amendments to the Bridge Guarantee
Agreement pursuant to which only the changes necessary to reflect the Extension
Amendment and the Commitment Increase Amendment shall be made to the Bridge
Guarantee Agreement; provided, however, that Motorola shall not be required to
agree to the Guarantee Increase to the extent (i) Motorola's liability under the
Guarantee Increase would exceed $350 million (inclusive of principal, interest
and other amounts) or (ii) any borrowing guaranteed by the Guarantee Increase
would be advanced or incurred after October 1, 1999 or have a maturity later
than December 29, 2000. In addition, subject to the terms of Sections 9(e) and
10, Motorola will enter into any amendment to a Guarantee Agreement, and will
consent to any amendment to, or other modification of, a Credit Agreement,
pursuant to which solely the following changes shall be made: (i) the maximum
liability of Motorola under such agreement shall be reduced and (ii) the
Commitment of the Lenders under such agreement shall be reduced.
(d) Consolidation or Separation of Amendments. The
foregoing amendments may be consolidated or separated into one or more
amendments to the then current Bridge Agreement, or may be effected pursuant to
one or more credit agreements (in addition to or in replacement of the then
current Bridge Agreement) having terms identical in all material respects (other
than terms as to pricing) to the then current Bridge Agreement (as otherwise
permitted to be amended pursuant to the MOU), to the extent that such amendments
or credit agreements, as the case may be, address the substantive issues
described in Sections 1(a)-(c); provided, however, that, if such amendments are
consolidated into the then current Bridge Agreement or into other credit
agreements, Motorola's obligations thereunder shall be no different than its
obligations would have been if each amendment had been provided pursuant to a
separate credit agreement. In addition, if the substance of the amendments
(including any roll-over of the existing Bridge Agreement, as contemplated by
Section 2(d)) is provided pursuant to a separate credit agreement, then Motorola
agrees to provide a guarantee of such credit agreement on terms identical in all
material respects to the Bridge Agreement Guarantee (but amended as contemplated
hereby). Any reference herein to the "Bridge Agreement" includes the existing
Bridge Agreement as so amended from time to time as well as any such separate
credit agreement; and any reference herein to the "Bridge Guarantee Agreement"
includes the existing Bridge Guarantee Agreement as amended from time to time in
accordance herewith, as well as any new Motorola guarantee thereof provided
pursuant hereto.
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(e) Option of Operating to Use the Guarantee Increase for
the Permanent Bank Facility. Subject to satisfaction of the New Guarantee
Condition, Motorola agrees that, upon the written request of Operating provided
prior to October 1, 1999, in lieu of up to $300 million of its commitment to
consent to the Commitment Increase and to provide up to $300 million of the
Guarantee Increase, Motorola will enter into an agreement with the lenders under
the Permanent Bank Facility to guarantee up to $300 million (inclusive of
principal, interest and other amounts) of Operating's borrowings under the
Permanent Bank Facility (the "Alternative Guarantee") on a basis identical in
all material respects to Motorola's Guarantee of borrowings under the Bridge
Agreement pursuant to the Bridge Guarantee Agreement. Motorola shall not be
required to provide the Alternative Guarantee to the extent (i) Motorola's
aggregate liability under the Alternative Guarantee and the Commitment Increase
would exceed $350 million (inclusive of principal, interest and other amounts)
or (ii) any borrowings guaranteed by the Alternative Guarantee would be advanced
or incurred after October 1, 1999 or have a maturity later than December 29,
2000. Motorola's obligation to provide the Alternative Guarantee is in lieu of
its obligations to consent to $300 million of the Commitment Increase and to
provide up to $300 million of the Guarantee Increase, and Motorola shall not be
required to consent to the Commitment Increase or to provide the Guarantee
Increase to the extent (but only to the extent) that it has provided the
Alternative Guarantee. (For the avoidance of doubt, for any period in which
Motorola provides the Alternative Guarantee in an amount of $300 million, each
of the Commitment Increase and the Guarantee Increase could not exceed $50
million, if otherwise available). Notwithstanding any other provision of this
MOU to the contrary, Motorola agrees that Motorola's obligation to provide up to
$300 million (inclusive of principal, interest and other amounts) of the
Guarantee Increase or, at Operating's request, $300 million (inclusive of
principal, interest and other amounts) of the Alternative Guarantee in lieu of
the Guarantee Increase shall be unconditional and irrevocable under any and all
circumstances (other than satisfaction of the New Guarantee Condition), and not
subject to any defense, set-off or counterclaim until the earlier of (i) October
1, 1999 and (ii) the first date on which the lenders under the Permanent Bank
Facility do not have the right to demand that any amount of the Alternative
Guarantee be applied to the Permanent Bank Facility (the "Release Date"). After
the Release Date, Motorola's obligation to provide this $300 million portion of
the Guarantee Increase and to permit Commitment increases related thereto shall
be subject to the conditions hereof, including, without limitation, Section 9(e)
and Section 10 and the New Guarantee Condition. (For the avoidance of doubt,
Motorola's obligation to provide the remaining up to $50 million portion of the
Guarantee Increase and to permit Commitment increases related thereto shall be
subject to the conditions hereof, including, without limitation, Sections 9(e)
and 10 and the New Guarantee Condition at all times).
(f) Except for Permanent Bank Facility, Loans Not to Exceed
Guarantees. Operating and Iridium hereby agree that, except in the case of the
Permanent Bank Facility and the Alternative Guarantee or if Motorola otherwise
provides its written consent (which may be conditional), with respect to a
Credit Agreement that is subject to
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a Guarantee by Motorola, neither Iridium nor Operating will draw loans on
commitments under such Credit Agreement in an amount that exceeds the Guarantee
available for such Credit Agreement unless all subsequent reductions to such
Credit Facility would first be applied on a one-for-one basis to reduce the
loans Guaranteed by Motorola (for the avoidance of doubt, in such cases, loans
guaranteed by Motorola must be the first loans repaid). In the case of the
Permanent Bank Facility in the event the Alternative Guarantee is applied
thereto, Operating and Iridium hereby agree that when the Alternative Guarantee
is in place, the Alternative Guarantee will be reduced from time to time on a
ratable basis with any payment or prepayment of the loans under the Permanent
Bank Facility (for example, if when there are $600 million of loans outstanding
under the Permanent Bank Facility and $300 million of the Alternate Guarantee is
in place, $200 million in loans are paid or prepaid, the amount available under
the Alternate Guarantee will be reduced by $100 million).
Section 2. $475 Million Increase to the Guaranteed Credit
Facility
(a) New Bank Guarantee. Subject to the satisfaction of the
New Guarantee Condition and the terms of Sections 9(e) and 10, upon the written
request of Operating provided prior to October 1, 1999, Motorola will (i)
consent to Operating's entering into an amendment to the Bridge Agreement
pursuant to which the Commitments thereunder shall be increased by up to $475
million (the "Guaranteed Credit Facility Increase") and (ii) enter into an
amendment to the Bridge Guarantee Agreement to guarantee up to $475 million
(inclusive of principal, interest and other amounts) of Operating's borrowings
under the Bridge Agreement (the "$475 Million Guarantee Amendment"); provided,
however, that Motorola shall not be required to consent to the Guaranteed Credit
Facility Increase or to enter into the $475 Million Guarantee Amendment to the
extent (i) Motorola's liability under the $475 Million Guarantee Amendment would
exceed $475 million (inclusive of principal, interest and other amounts) or (ii)
any borrowings guaranteed thereby would be advanced or incurred after October 1,
1999 or have a maturity later than December 29, 2000. In consideration for
providing the $475 Million Guarantee Amendment, Operating and Iridium will
compensate Motorola pursuant to the Agreement Regarding Guarantee.
(b) New Guarantee Condition. Motorola's obligations under
Sections 1(b), 1(c), 1(e), 2(a) and 3 are subject to the satisfaction of the
following condition (the "New Guarantee Condition"): Operating obtaining, prior
to January 1, 1999, the Permanent Bank Facility, with commitments thereunder of
no less than $800 million and a maturity not earlier than December 29, 2000.
(c) Agreements of Operating with Respect to the Guaranteed
Credit Facility Increase. Operating hereby agrees that, of the amounts borrowed
by Operating pursuant to the Guaranteed Credit Facility Increase and the
Permanent Bank Facility, an aggregate of not less than $400 million of such
amounts will be used for payments to
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Motorola for amounts due to Motorola under any agreement (for the avoidance of
doubt, the refinancing of existing indebtedness incurred to make payments to
Motorola shall not be considered in determining whether Operating has used not
less than $400 million for payments to Motorola).
(d) Combination of $275 Million Existing Bridge Agreement
with Guaranteed Credit Facility Increase. If the substance of the Guaranteed
Credit Facility Increase is provided pursuant to a new credit agreement (as
contemplated by Section 1(d) above), Motorola agrees that, upon the request of
Operating, it will consent to a roll-over of the existing $275 million Bridge
Agreement into such new credit agreement, and it will provide a guarantee of
that Credit Agreement which combines the then current $275 million Bridge
Guarantee Agreement with the substance of the $475 million Guarantee Amendment;
provided, however, that, if the Guaranteed Credit Facility Increase and the
Guarantee Amendment is provided pursuant to a new Credit Agreement and Guarantee
in connection with such a roll-over, Motorola's obligations under that new
credit facility and Guarantee shall be no different than its obligations would
have been if the Guaranteed Credit Facility Increase and Guarantee Amendment had
been provided pursuant to an amendment to the Bridge Agreement and the Bridge
Guarantee Agreement.
Section 3. O&M Contract Financing.
(a) New O&M Financing. Subject to the New Guarantee
Condition, Motorola agrees to defer its receipt (the "O&M Deferrals") of amounts
due from Operating to Motorola under the O&M Contract beginning with the full
amount of the "November-December" 1998 payments due under the O&M Contract, up
to an aggregate of $400 million (the "O&M Financing Amount") until December 29,
2000. At Motorola's request, Operating will execute and deliver from time to
time such evidences of Operating's obligations to pay amounts outstanding under
the O&M Contract, including any outstanding O&M Financing Amount, in such form
as Motorola may reasonably request; provided, however, that the O&M Financing
Amount and such evidences of Operating's obligations will be subordinated as
provided in Section 6. Operating and Iridium hereby agree that all amounts due
under the O&M Contract which are not subject to the O&M Deferrals shall be paid
in full when due. In consideration for providing the O&M Deferrals, Iridium and
Operating will compensate Motorola pursuant to the Agreement Regarding
Guarantee, and the outstanding amount of O&M Deferrals shall constitute Motorola
Exposure for purposes of, and as set forth in, the Agreement Regarding
Guarantee.
(b) Agreement to Refinance the O&M Financing Amount.
Operating agrees that it will use its best efforts to finance the payment of
all outstanding O&M Financing Amounts no later than October 1, 1999 pursuant to
a new Credit Agreement (the "O&M Credit Facility") that (i) has terms identical
in all material respects to the Bridge Agreement (other than terms as to
pricing) and (ii) is guaranteed by Motorola on terms identical in all material
respects to the Bridge Agreement Guarantee (the "O&M
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Guarantee"). Subject to the terms of Sections 9(e) and 10 and the New Guarantee
Condition, upon the written request of Operating, made on or before October 1,
1999 Motorola will (i) consent to Operating's entering into the O&M Credit
Facility and (ii) enter into an agreement (the "O&M Guarantee Agreement") for
the benefit of Operating with the lenders and other parties to the O&M Credit
Facility to guarantee up to $400 million (inclusive of principal, interest and
other amounts) of Operating's borrowings under the O&M Credit Facility;
provided, however, that, without relieving Operating of its obligation hereunder
to refinance the O&M Financing Amount pursuant to the O&M Credit Facility,
Motorola shall not be required to consent to Operating's entering into the O&M
Credit Facility or enter into the O&M Guarantee Agreement to the extent (i)
Motorola's liability under the O&M Guarantee Agreement would at any time exceed
the lesser of (A) the O&M Financing Amount then outstanding or (B) $400 million
(inclusive of principal, interest and other amounts) or (ii) any borrowings
guaranteed thereby would have a maturity later than December 29, 2000. In
consideration for providing the O&M Guarantee, Iridium and Operating will
compensate Motorola pursuant to the Agreement Regarding Guarantee, and, as set
forth therein, outstanding amounts under the O&M Credit Facility that are
subject to the O&M Guarantee shall constitute Motorola Exposure for purposes of
the Agreement Regarding Guarantee.
(c) Agreements of Operating with Respect to the O&M
Guarantee. Operating hereby agrees that any amounts borrowed under the O&M
Credit Facility will be used exclusively for payments to Motorola of the O&M
Financing Amount or other payments under the O&M Contract. Operating hereby
agrees that, unless Motorola has failed to provide an O&M Guarantee that it is
required to provide under the terms hereof, to the extent of available funds
under the O&M Credit Facility, Operating shall borrow such available funds and
apply all such funds to pay Motorola for outstanding O&M Financing Amounts.
Section 4. Senior Notes.
(a) Terms of any Additional Senior Notes. Each of Iridium
and Operating agree with Motorola that any Additional Senior Notes will have
terms that are no less favorable to Motorola than the Material Terms (as
defined). The "Material Terms" are those described under "Description of Notes"
in the Offering Memorandum for the Series C Notes, dated October 9, 1997 (the
"Offering Memorandum") under the captions "Change of Control", "Certain
Covenants--Limitations on Indebtedness," "--Limitation on Restricted Payments,"
"--Limitation on Transactions with Affiliates," "--Limitations on Liens" and
"Defaults" (as well as any definitions used in such provisions), each only as
they relate to (i) Motorola or (ii) the ability of Operating (as successor to
Iridium) to make payments to Motorola under any written agreement between
Motorola and Iridium or prepay indebtedness under any Credit Agreement.
(b) Repurchase of Senior Notes. Operating agrees to repay
all amounts outstanding under the Bridge Agreement, the O&M Credit Facility and
any other
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Credit Facility that has the benefit of a Guarantee, including, without
limitation, the portion of the Permanent Bank Facility guaranteed by the
Alternative Guarantee if the Alternate Guarantee is in effect thereon, and to
terminate the commitments thereunder prior to or simultaneously with any
redemption of any Senior Notes pursuant to any optional redemption provisions of
any Senior Notes. In the event that Operating is required to purchase any Senior
Notes as a result of a "change of control" as defined in the Offering Memorandum
(other than a "change of control" triggered by a change in Motorola's ownership
of Iridium), Operating agrees to repay the Bridge Agreement, the O&M Credit
Facility, any other Credit Facility that has the benefit of a Guarantee,
including without limitation, the portion of the Permanent Bank Facility
guaranteed by the Alternative Guarantee and any other Motorola Exposure pro rata
with such purchase of Senior Notes or, if Operating is unable or unwilling to do
so, Operating hereby waives its right to pay Motorola High Yield Compensation
pursuant to Section 3 of the Agreement Regarding Guarantee, as amended, until it
does so.
Section 5. Financings after the Permanent Funding Date;
Acquisitions.
(a) Reduction of Motorola Exposure -- Mandatory Prepayments
From Excess Cash Flow. Each of Iridium and Operating agrees to use its best
efforts (to the extent permitted by the Permanent Bank Facility), including
consummating an offering or offerings of Additional Securities and obtaining
credit agreements that are not guaranteed by Motorola, to reduce the Motorola
Exposure to an amount less than or equal to $275 million by the earliest
possible date. Each of Iridium and Operating hereby confirm that the resolutions
of November 24, 1998 of their respective Boards of Directors which authorize the
issuance of up to $750 million of Additional Securities are in effect on the
date hereof. Each of Iridium and Operating further agree that, not later than
the date 60 days after the end of Operating's first three fiscal quarters and
120 days after the end of Operating's fiscal year (commencing with the first
fiscal quarter ending on March 31, 1999), Operating shall use Excess Cash Flow
(as defined below) that is available to it under the terms of the Permanent Bank
Facility and its other credit agreements (and not required to be applied to
prepay loans), if any, to reduce Motorola Exposure until the Motorola Exposure
is less than or equal to $275 million, it being the intent of the parties that
during the term of the Permanent Bank Facility Excess Cash Flow will be applied
to reduce the commitments of the lenders (or outstanding loans) under the
Permanent Bank Facility and the Motorola Exposure on as close to equal basis as
the Permanent Bank Facility permits (for the avoidance of doubt, it is the
intent of the parties that, if for any period 50% of Excess Cash Flow for that
period is applied to prepay the loans under the Permanent Bank Facility, as
close to the other 50% of Excess Cash Flow as possible would be applied to
otherwise reduce Motorola Exposure); provided, however, that Iridium and
Operating shall not be required to apply Excess Cash Flow to the reduction of
Motorola Exposure pursuant to this Section 5(a) to the extent that, taking into
account Operating's (i) expected cash needs (based on budgeted costs), (ii)
expected cash revenues and (iii) expected external financing, such reduction of
Motorola Exposure would be reasonably expected to result in Operating not having
sufficient cash (or access
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to cash) to meet its expected cash needs in the quarter in which such
application of Excess Cash Flow is to be made and the following quarter.
"Excess Cash Flow" means, for any period, the definition ascribed to such term
in the Permanent Bank Facility. Operating and Iridium hereby agree not to amend
such definition without the written consent of Motorola.
(b) No Acquisitions Without Motorola Approval. Iridium and
Operating agree that neither Iridium nor Operating nor IWCL nor any other entity
controlled, directly or indirectly, by Iridium, Operating or IWCL will finance
or carry any business acquisitions, directly or indirectly, with working capital
or with any indebtedness of Iridium or Operating or any of their respective
Subsidiaries without the consent of Motorola; provided, however, that this
limitation shall not apply if, after giving effect to the acquisition (including
the financing thereof), the Motorola Exposure is less than or equal to $275
million.
(c) Additional Compensation For Non-Reduction of Motorola
Exposure. Iridium and Operating agree that, if the Motorola Exposure exceeds
$275 million at any time after December 31, 2000, Iridium and Operating shall
make a one time cash payment to Motorola, which shall be payable immediately
upon the Motorola Exposure first exceeding such threshold amount after such
date, in the amount of $35 million (as additional compensation and not as a
penalty) and such payment shall be in addition to amounts due from Iridium and
Operating under the Agreement Regarding Guarantee.
Section 6. Subordination.
(a) Guarantee Increase. Motorola hereby agrees with
Operating that Motorola will comply with its obligations under Article VI of the
Motorola Consent (or any replacement consent), including its obligations to
agree that any reimbursement rights of Motorola against Operating relating to
any payments made by Motorola to Operating's creditors under the Guarantee
Increase, the Alternative Guarantee, the $475 Million Guarantee Amendment, the
O&M Guarantee and the Handset Guarantee will be Motorola Subordinated Claims (as
defined in the Motorola Consent) with respect to Operating's obligations under
Operating's Senior Bank Debt (as defined in the Motorola Consent), and will rank
pari passu with all other senior unsecured indebtedness of Operating. Operating
hereby agrees with Motorola that Operating will comply with its obligations
under Article VI of the Motorola Consent.
(b) O&M Deferrals. Motorola hereby agrees with Operating
that Operating's payment obligations for amounts deferred pursuant to the O&M
Deferrals (including the O&M Financing Amount), whether pursuant to the O&M
Contract, this MOU or the Agreement Regarding Guarantee, will be Motorola
Subordinated Claims with respect to Operating's Senior Bank Debt and will rank
pari passu with all other
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senior unsecured indebtedness of Operating, including, without limitation, the
Senior Notes.
(c) Amendment of Motorola Consent. Motorola hereby agrees
that it will enter into any amendment to, or replacement of, the Motorola
Consent to the extent such amendment or replacement is necessary to reflect the
Permanent Bank Facility and the other agreements contemplated by the MOU
(including the agreements regarding subordination set forth in Sections 6(a) and
6(b)).
Section 7. Agreement Regarding Guarantee. Motorola, Iridium and
Operating each agree to execute and deliver the Third Amended and Restated
Agreement Regarding Guarantee in the form attached hereto as Annex A
contemporaneously with the execution and delivery of this MOU.
Section 8. TNDC Vendor Financing. Notwithstanding Articles 6.G and
6.I of the TNDC (which are hereby deleted in their entirety from the TNDC),
Operating shall pay Motorola the amounts to be paid under Paragraphs C, D, E, F,
G, I, J, K, L, M, N, O and P of Article 5, "Price", of the TNDC as follows:
(a) Upon Motorola's completion of any milestone
associated with such Paragraphs C, D, E, F, G, I, J, K, L, M,
N, O and P, Motorola shall provide Operating notice of such completion.
(b) Operating shall have up to twelve (12) months
from such milestone completion date to pay Motorola the full amount
corresponding to such completed milestone plus interest at the rate of ten
percent (10%) per annum beginning on the milestone completion date (with such
compensation to be paid in the manner and at the times specified in Section
3(c) of the Agreement Regarding Guarantee).
(c) If Operating has not paid in full the amount of
such milestone (plus all accrued interest) by the end of such twelve month
period, then the amount of such milestone (plus all accrued interest) which
remains unpaid shall become part of both the "Vendor Financing Amount" and the
"Motorola Exposure" under the Agreement Regarding Guarantee.
Section 9. Certain Additional Agreements.
(a) Indebtedness Conditions. Each of Iridium and Operating
agrees that Iridium and Operating (on a consolidated basis) shall not have
outstanding at any time prior to the Extended Maturity Date (i) in excess of
$1.7 billion of indebtedness for borrowed money that is secured by the assets of
Operating, (ii) in excess of $1.62 billion in aggregate principal amount (or
initial gross proceeds in the case of the Outstanding Senior Notes) of Senior
Notes, including the Outstanding Senior Notes and the aggregate principal amount
of any Additional Senior Notes or (iii) any other indebtedness of the
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types described in (i) and (ii) above if the aggregate amount of indebtedness of
the types described in (i) and (ii) would be in excess of $3.32 billion, unless,
in each case, (A) the total Motorola Exposure (other than Excluded Indebtedness)
is (or, after the issuance of such indebtedness and the receipt and application
of the proceeds thereof would be) less than or equal to $275 million, (B)
Motorola is being compensated for such Motorola Exposure pursuant to Section
2(e) of the Agreement Regarding Guarantee and (C) none of the Motorola Exposure
is subordinated to any Senior Notes.
"Excluded Indebtedness" means up to $150 million of unsecured indebtedness owed
to Motorola relating to approved amendments to the TNDC (including TNDC
Amendment No. 3 and TNDC Amendment No. 4).
(b) Motorola Representation. Operating and Iridium
hereby agree that, based on Motorola's current holdings of Membership Interest
and the terms of the LLC Agreement of Iridium LLC (i) so long as the Motorola
Exposure is less than or equal to $750 million and greater than $275 million,
Motorola will be entitled to designate 5 members of the Iridium Board of
Directors and (ii) so long as the Motorola Exposure is greater than $750
million, Motorola will be entitled to designate 6 members of the Iridium LLC
Board of Directors and 1 additional member of the Banking and Financing
Committee thereof; and Operating and Iridium further agree that all approvals
and consents of the members of Iridium and the respective Boards of Directors of
Iridium and Operating necessary to effect such representation of Motorola at
such times have been obtained. For the duration of any period in which the
Motorola Exposure is less than or equal to $275 million, Motorola is being
compensated for such Motorola Exposure pursuant to Section 3(e) of the Agreement
Regarding Guarantee and Motorola has not been required to make any payments
under the Bridge Guarantee Agreement or any other Guarantee, Motorola will (i)
cause its Series B Class 2 Director to resign from the Iridium LLC Board of
Directors and (ii) deliver over to an escrow agent selected by Motorola and
Iridium all of its Series B Class 2 Interests and Series C Class 2 Interests
under an agreement specifying that such agent shall not exercise any rights
represented by those interests. Iridium hereby agrees that it will reregister
the transfer immediately after the Motorola Exposure is more than $275 million.
Each of Iridium and Operating hereby agree that, if and to the extent Motorola
is entitled to representation on their respective boards of directors (or
committees thereof) as a result of holding Series B Class 2 Interests or Series
C Class 2 Interests, Iridium and Operating will take all necessary action to
ensure that Motorola is provided such representation.
(c) O&M Contract Extension. Operating will exercise
its existing option to extend the O&M Contract with Motorola if, and at the time
when, it is required to do so by the terms of the Senior Notes, the Bridge
Agreement, the O&M Credit Facility, the Permanent Bank Facility or any other
Credit Agreement.
(d) [Reserved]
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(e) Timely Payment. Iridium and Operating hereby
agree to pay (and to cause their affiliates to pay) all amounts due to Motorola
at the time due and further agree that if any "Material Payment Default" by
Iridium or Operating in an amount due to Motorola occurs and is not cured within
30 days, (i) Motorola's obligations hereunder, including, without limitation,
its obligation to provide additional Guarantees, shall cease and (ii) Motorola
may terminate Operating's right to draw on any undrawn Commitments supported by
an outstanding Guarantee under a Credit Agreement; provided, however, this
Section 9(e) shall not affect: (1) Motorola's obligation to (A) provide $300
million of the Guarantee Increase or $300 million of the Alternative Guarantee
prior to the Release Date or (B) to defer receipt of up to $400 million of O&M
Deferrals in accordance with Section 3(a); or (2) Operating's right to draw on
any undrawn Commitments supported by Motorola's Guarantee of up to $275 million
of revolving Commitments under the Bridge Agreement (or any replacement thereof
as contemplated by Section 2(d)).
"Material Payment Default" means any failure by Iridium or Operating to pay
Motorola an amount due to Motorola at or prior to the time such amount is due
which, unless being contested in good faith, individually or in the aggregate
with all other amounts Iridium and Operating have failed to pay Motorola (which
are not being contested in good faith), exceeds $5 million.
Section 10. Conditions. Iridium, Operating and Motorola acknowledge
that the execution and delivery of each document contemplated hereby is subject
to the compliance of Iridium and Operating with the Agreement Regarding
Guarantee and this MOU (including, without limitation, Section 9(e)).
Notwithstanding anything herein to the contrary, this Section 10 shall not
affect Motorola's obligation (i) to provide $300 million of the Guarantee
Increase or $300 million of the Alternative Guarantee prior to the Release Date
or (ii) to defer receipt of up to $400 million of O&M Deferrals in accordance
with Section 3(a). Iridium and Operating acknowledge that Motorola's agreements
set forth in this MOU also are conditioned upon consistency of the transactions
and agreements contemplated hereby with the terms set forth, or referenced in
this MOU. If the terms of the transactions or agreements contemplated hereby
vis-a-vis Motorola differ materially and adversely from such documents, or
contain additional material and adverse terms (in each case, in Motorola's
discretion acting in good faith), Iridium and Operating acknowledge that
Motorola has no obligation to execute any documents or to consent to the
transactions contemplated hereby.
Section 11. Acceptance of Certain Milestones. Operating hereby
agrees that upon execution and delivery of this MOU by Motorola, Operating (i)
will accept, as of November 1, 1998, Milestone 47 of the SSC and Milestones 7
and 8 of the TNDC and (ii) has accepted, or will accept as of November 1, 1998,
all other Milestones under the SSC, the TNDC and other agreements with Motorola
with respect to which the payment is required by this Section 11; and Operating
hereby agrees that it will make payment or
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payments to Motorola on or before December 31, 1998 in respect of such
Milestones in the aggregate amount of $370,663,615.
12. Complete Agreement. This MOU and the other
agreements and instruments referred to herein embody the complete agreement and
understanding among the parties with respect to the matters addressed herein and
supersede and preempt the First Amended and Restated Memorandum of Understanding
and any prior understandings, agreements or representations by or among the
parties, written or oral, which may have related to the subject matter hereof in
any way.
13. Miscellaneous. This MOU (a) is made under and
shall be governed by the laws of the State of New York without regard to
principles of conflict of laws, (b) may be executed in counterparts, each of
which taken together shall constitute one and the same instrument and (c) may be
amended or waived only if such amendment or waiver is in writing and signed by
the party against whom it is sought to be enforced.
14. Limited Rights Against Motorola. The parties
hereto agree that Iridium and Operating shall have no rights (apart from those
set forth in this MOU, the Agreement Regarding Guarantee or any other written
agreements between such parties) against Motorola as a result of Iridium's or
Operating's inability to meet drawing or other conditions under the Bridge
Agreement or any other Credit Agreement.
15. Third Party Beneficiaries. Except for the
provisions of this MOU concerning or relating to Motorola's obligation to
provide (i) the $300 million Alternative Guarantee and (ii) the up to $400
million of O&M Deferrals (which also are for the benefit of, and also may be
relied upon by, the Lenders and agents under the Permanent Bank Facility until
the Release Date), this MOU is intended for the benefit of the parties hereto
and is not intended to benefit any other person and no person other than the
parties hereto may rely upon the provisions hereof.
* * * *
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IN WITNESS WHEREOF, the parties have executed this Memorandum of
Understanding as of December 23, 1998.
MOTOROLA, INC.
By:
----------------------------
Name:
Title:
IRIDIUM LLC
By:
----------------------------
Name:
Title:
IRIDIUM OPERATING LLC
By:
----------------------------
Name:
Title:
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EXHIBIT 7
EXECUTION COPY
THIRD AMENDED AND RESTATED
AGREEMENT REGARDING GUARANTEE
This Third Amended and Restated Agreement Regarding Guarantee
(this "Agreement") is made by and among Motorola, Inc., a Delaware corporation
("Motorola"), Iridium LLC, a Delaware limited liability company ("Iridium"), and
Iridium Operating LLC, a Delaware limited liability company and a wholly-owned
subsidiary of Iridium ("Operating"), is dated as of December 23, 1998, and
amends and restates the Second Amended and Restated Agreement Regarding
Guarantee, dated as of May 11, 1998 (the "Second Amended Agreement Regarding
Guarantee") among Motorola, Iridium and Operating, which amended and restated
the Amended and Restated Agreement Regarding Guarantee, dated as of July 11,
1997 (the "First Amended Agreement Regarding Guarantee") between Motorola and
Iridium, which amended and restated the Agreement Regarding guarantee originally
dated as of August 21, 1996 (the "Original Agreement Regarding Guarantee")
between Motorola and Iridium. In connection with, and as a condition to,
entering this Agreement, Operating, Iridium and Motorola have entered into that
certain Second Amended and Restated Memorandum of Understanding (the "MOU"),
dated December 23, 1998.
Motorola has entered into a Guarantee Agreement, dated as of
August 21, 1996, as amended (the "Bridge Guarantee Agreement"), pursuant to
which Motorola has guaranteed the payment of up to $275,000,000 of the
obligations of Iridium under that certain Credit Agreement, dated as of August
21, 1996, as amended, between Operating (as successor to Iridium) and the
Lenders named therein (the "Bridge Agreement"). The First Amended Agreement
Regarding Guarantee and the Original Agreement Regarding Guarantee defined
certain rights and obligations of the parties relating to such guarantee and
possible additional guarantees by Motorola.
Capitalized terms used and not otherwise defined herein shall
have the meanings ascribed thereto in the Bridge Agreement.
On December 18, 1997, following the date of the First Amended
Agreement Regarding Guarantee, Iridium entered into an asset drop-down
transaction (the "Asset Drop-Down Transaction") with Operating, pursuant to
which substantially all of the assets and liabilities of Iridium were
transferred to Operating.
Operating has entered into a $1 billion senior secured interim
Credit Agreement, dated as of December 19, 1997, with the banks and other
financial institutions named therein (the "Secured Bank Facility").
Operating, Iridium and IWCL intend to raise new funds and
engage in other transactions to finance Operating's development, construction
and operation of the Iridium satellite communications system (the "Iridium
System"), including the refinancing of Operating's indebtedness under the
Secured Bank Facility. As set forth in
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the MOU, Motorola has conditionally agreed to provide certain additional support
to the efforts of Operating and Iridium to obtain such financing, including the
Guarantee Increase (as defined in the MOU), the Alternative Guarantee (as
defined in the MOU), the $475 Million Guarantee Amendment (as defined in the
MOU), the O&M Deferrals (as defined in the MOU) and the O&M Guarantee (as
defined in the MOU).
The purpose of this Agreement is to set forth certain binding
agreements among Motorola, Iridium and Operating that are intended to (i)
incorporate the remaining pertinent terms of the Second Amended Agreement
Regarding Guarantee and (ii) reflect certain agreements of the parties in
respect of the Guarantee Increase, the Alternative Guarantee, the $475 Million
Guarantee Amendment, the O&M Deferrals and the O&M Guarantee.
The parties agree as follows:
1. Handset Guarantee.
(a) Motorola Agreement to Provide Handset Guarantee. If at
any time and from time to time Operating becomes obligated to purchase hand-held
phones or belt-worn pagers (collectively, "Subscriber Equipment") from Motorola
pursuant to that certain Standby Purchase Agreement between Motorola and
Operating (the "Handset Purchase Agreement"), Motorola hereby agrees, upon the
written request of Operating, to provide a Guarantee relating to an aggregate of
up to $175 million of Commitments (the "Handset Guarantee") under the Bridge
Agreement or under a separate Credit Agreement having the terms identical in all
material respects to the then current Bridge Agreement; provided, however, that
Motorola shall not be required to agree to a Handset Guarantee to the extent
that Motorola's liability under the Handset Guarantee would exceed $175 million
(inclusive of principal, interest and other amounts).
(b) Operating Agreements with Respect to Handset Guarantee.
Operating hereby agrees that all funds borrowed that are subject to the Handset
Guarantee ("Handset Borrowings") will be used exclusively for payments to
Motorola under the Handset Purchase Agreement. Operating hereby agrees that, if
Motorola provides the Handset Guarantee, to the extent of available funds that
are subject to the Handset Guarantee, Operating shall borrow available funds
under the Handset Guarantee and pay all amounts due under the Handset Purchase
Agreement.
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2. Reimbursement Obligation.
(a) Operating Default. Other than as set forth under Section
2(b) below, if and to the extent that any Lenders demand that Motorola pay, and
Motorola does pay, any Guaranteed Amount pursuant to any Guarantee, Operating
shall, promptly upon receipt from Motorola of a written demand for
reimbursement, reimburse Motorola for such Guarantee Payment, plus interest
accruing at a rate equal to that which would be in effect under the Credit
Agreement relating to such Guaranteed Amount, without duplication; provided that
this Section 2(a) shall not affect the obligations of Iridium and Operating to
pay compensation pursuant to Section 3.
(b) Motorola Default. If a Guarantee Payment is made in
respect of a Guaranteed Amount that has been accelerated or otherwise become due
as a result of a Motorola-Based Default, then (i) Motorola shall assume and
become subject to the obligations of the Lenders under the applicable Credit
Agreement vis-a-vis Operating (including, without limitation, the obligation to
make loans in the aggregate principal amount of such Lenders' commitments under
such Credit Agreement), (ii) Motorola shall assume and become entitled to the
benefits of the rights of the Lenders under such Credit Agreement vis-a-vis
Operating (including, without limitation, the right to receive payments in
respect of loans made under such Credit Agreement, upon acceleration or
otherwise), but not including any provisions relating to a Guarantee or any
right or remedy arising as a result of the occurrence of a Motorola-Based
Default, (iii) Operating shall become obligated to reimburse Motorola for such
Guarantee Payment and to repay any additional amounts for which Operating may
become indebted to Motorola pursuant to clause (ii) above on the terms and
conditions contained in such Credit Agreement as such Credit Agreement is
modified by clause (ii) above, and (iv) Operating shall continue to be subject
to the terms and conditions of such Credit Agreement (including, without
limitation, the covenants contained therein), as such Credit Agreement is
modified by clause (ii) above, it being expressly understood that Motorola shall
in such circumstances have the right to accelerate payments under and otherwise
exercise its rights under any such Credit Agreement to the extent set forth
therein as if it were a lender thereunder to the extent that such right to
accelerate or other rights arise from some event or circumstance other than a
Motorola-Based Default or a Guarantee.
(c) Costs and Expenses. Operating further agrees to
reimburse Motorola for all reasonable out-of-pocket costs and expenses
(including, without limitation, the fees and expenses of legal counsel) in
connection with any enforcement of Operating's obligations under Section 2(a)
(including, without limitation, any fees and expenses incurred in connection
with any bankruptcy proceedings).
(d) Subordination. The rights of Motorola under this
Section 2 shall be subject to the terms and conditions of any
applicable subordination agreements then in effect executed by Motorola for the
benefit of creditors of Operating.
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3. Compensation to Motorola.
(a) Warrant Compensation. Except as set forth in Sections 3
(e) and 3(f), Iridium shall compensate Motorola for incurring the Motorola
Exposure by issuing warrants (the "Warrants") to purchase Class 1 Interests in
Iridium ("Shares") to Motorola in the amounts specified in the table below. The
Warrants shall (i) be in substantially the form of the warrants issued pursuant
to the Original Agreement Regarding Guarantee, (ii) provide for a ten year term
and an exercise price of $0.00013 per Class 1 Interest; (iii) become exercisable
on March 1, 2001 or upon receipt if issued after that date and (iv) provide for
issuance of Shares that (A) with respect to Shares issued for Warrants received
on or prior to November 1, 1998, may be sold without transfer restrictions
(other than transfer restrictions imposed by the LLC Agreement, the Interest
Exchange Agreement and applicable securities law) at any time after the fifth
anniversary of the exercise of the Warrants and (B) with respect to Shares
issued for Warrants received after November 1, 1998, may be sold without
transfer restrictions (other than transfer restrictions imposed by the LLC
Agreement, the Interest Exchange Agreement and applicable law) at any time after
the exercise of the Warrants (a form of Warrant is attached hereto as Exhibit
1). In addition, in the event that Motorola earns Warrants with respect to
periods beginning after March 1, 2001, at Motorola's election, Iridium shall
compensate Motorola with Shares issued directly to Motorola in the amounts
specified in the table below in lieu of Warrants.
(b) Calculation of Warrant Compensation. Subject to
Sections 3(e) and 3(f), Motorola shall earn Warrants or Shares based on the
amount and duration of Motorola Exposure. The number of Warrants or Shares shall
be earned according to the following table, pro rated both (A) for the actual
dollar amount of Motorola Exposure outstanding during each relevant period and
(B) for the number of days such Motorola Exposure was outstanding during such
period. The following table indicates the maximum amount of Warrants or Shares
issuable for each full $100 million of Motorola Exposure, assuming such Motorola
Exposure was outstanding during the entire relevant period.
<TABLE>
<CAPTION>
MOTOROLA EXPOSURE NUMBER OF SHARES PER $100 MILLION
OF MOTOROLA EXPOSURE PER YEAR
(PRIOR TO NOVEMBER 1, 1998)
<S> <C> <C>
$ 0 -- $ 275,000,000 0/412,500(1)
275,000,001 -- 499,999,000 412,500
500,000,000 -- 749,999,999 637,500
750,000,000 -- (or more) 825,000
(AFTER NOVEMBER 1, 1998)
$ 0 -- $275,000,000 0/412,500(1)
275,000,001 -- 499,999,999 412,500
500,000,000 -- 749,999,999 637,500
750,000,000 -- 849,999,999 825,000
850,000,000 -- 949,999,999 847,500
950,000,000 -- 1,049,999,999 877,500
</TABLE>
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<TABLE>
<CAPTION>
MOTOROLA EXPOSURE NUMBER OF SHARES PER $100 MILLION
OF MOTOROLA EXPOSURE PER YEAR
<S> <C> <C>
1,050,000,000 -- (or more) 900,000
</TABLE>
- ----------
(1) See Section 3(e) below
For example, if there were $750,000,000 of Motorola Exposure outstanding for a
period of one year, Motorola will have earned Warrants relating to 6,187,500
Shares ($750,000,000 / 100,000,000 = 7.5; 7.5* 825,000 = 6,187,500).
(c) Payments of Compensation Due Pursuant to This Agreement.
Operating and Iridium hereby agree that they will pay, or cause to be paid, all
compensation due to Motorola pursuant to this Agreement, including, without
limitation, Warrants, Shares or IWCL Warrants due pursuant to Sections 3(a),
3(e) and 3(f) and cash due pursuant to Sections 3(e) and 3(f), quarterly (for
the fiscal quarter of Motorola then ending) no later than 48 hours prior to the
last day of each fiscal quarter of Motorola.
(d) Warrants Issued to Date; No Further Limitations on
Warrant Compensation. The parties acknowledge that Warrants for 7,741,346 Shares
have been earned by Motorola as of December 15, 1998 with respect to outstanding
Motorola Exposure (not including compensation earned pursuant to Section 3(e)).
The parties agree that no limitation shall apply to compensation earned pursuant
to this Section 3.
(e) High Yield Equivalent Compensation. During any period
in which each of the following conditions (the "High Yield Equivalent
Conditions") exists: (i) the Motorola Exposure outstanding shall be $275,000,000
or less; (ii) no other person or party providing guarantees for the support of
Iridium's indebtedness for borrowed money is receiving equity compensation from
Iridium or IWCL in respect of such guarantees, (iii) no mandatory prepayment or
redemption or acceleration of any Senior Notes (as defined in the MOU) has
occurred (except as a result of Motorola's disposition of Class 1 Interests
causing a "change in control" (as defined in the Offering Memorandum) to occur
under the Senior Notes); and (iv) Iridium has complied with the terms of this
Agreement and the MOU, then, at Iridium's option, in lieu of issuing Warrants or
Shares pursuant to Sections 3(a) and 3(b). Iridium and Operating shall pay
compensation to Motorola (the "High Yield Compensation") as follows:
(1) Operating shall pay Motorola cash compensation for
the Motorola Exposure, in an amount equal to (x) the average daily
Motorola Exposure during any period for which the Motorola Exposure is
greater than zero multiplied by the excess, if any, of (A) the weighted
average daily interest rate applicable to the Series A Notes and Series B
Senior Notes (13.625% / 360 = 0.0378472%) over (B) the weighted average
daily interest rate actually charged by the Lenders under the Credit
Agreements related to the Motorola Exposure for such period.
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(2) Iridium shall issue to Motorola warrants
("IWCL Warrants") to purchase shares of Class A Common Stock of IWCL (the
"Common Stock") in an amount equal to the average daily principal amount
of Motorola Exposure during such period multiplied by the daily
equivalent of the warrant compensation payable to the initial holders of
the units comprised of warrants to purchase Common Stock and Series A
Notes with respect to such amount (calculated on a pro rata daily basis
from the date of the issuance of such Series A Notes to the stated
maturity thereof, such amount being IWCL Warrants to purchase 66.758
shares of Common Stock per each full $100,000,000 of Motorola Exposure
per day (calculated on a pro rata basis for the actual amount of Motorola
Exposure outstanding)). IWCL Warrants issued pursuant to this paragraph
(2) will have the same exercise price as the warrants issued with the
Series A Notes ($20.90 per share of Common Stock, subject to
anti-dilution adjustments) but all other terms of the IWCL Warrants and
Common Stock will be as specified for Warrants and Shares, respectively,
in Section 3(a) (the IWCL Warrants will provide for a ten year term,
become exercisable on March 1, 2001 or upon receipt if issued after that
date and be issued free of restrictions on transfer (other than
restrictions imposed by applicable law)); provided, however, that, if
Motorola's holdings of Common Stock, including Common Stock issuable upon
exercise of IWCL Warrants or similar securities (but not including Common
Stock issuable under the Interest Exchange Agreement), would cause the
Iridium Bermuda Special Rights Period (as defined in the LLC Agreement)
to terminate, Motorola will not be issued IWCL Warrants or Common Stock
but instead will be issued Warrants or Shares (with substitution on a
one-for-one basis, subject to the anti-dilution provisions of the
Interest Exchange Agreement). A form of IWCL Warrant is attached hereto
as Exhibit 2. Iridium hereby agrees to exercise its rights under the
Share Issuance Agreement and to take all other necessary actions to cause
IWCL to (i) reserve sufficient shares of Common Stock for issuance upon
exercise of all outstanding IWCL Warrants and (ii) issue shares of Common
Stock in respect of IWCL Warrants at the time or times such IWCL Warrants
are duly exercised, and Iridium agrees not to agree to any amendment to
the Share Issuance Agreement that would be reasonably likely to adversely
affect Iridium's ability to perform its obligations hereunder.
(3) In each case (1) and (2) multiplied by the number
of days the Motorola Exposure is outstanding.
(f) Limited Term Cash and IWCL Warrant Compensation for
Certain Motorola Exposure. Prior to October 1, 1999, Motorola shall not be
compensated pursuant to Section 3(a) or Section 3(e) for Motorola Exposure that
results from the $475 Million Guarantee Amendment, the Handset Guarantee, the
O&M Guarantee or the O&M Deferrals (collectively, the "New Exposure") but shall
be compensated for such New Exposure as set forth in this Section 3(f).
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(1) For all New Exposure relating to the $475 Million
Guarantee Amendment, the Handset Guarantee or the O&M Guarantee which
exists at any time prior to October 1, 1999 (the "New Guarantee
Exposure"), Motorola shall be paid cash and IWCL Warrant compensation
calculated pursuant to clauses (1), (2) and (3) of Section 3(e) with such
New Guarantee Exposure being Motorola Exposure for the purposes of such
calculation.
(2) For all New Exposure relating to the O&M Deferrals which
exists at any time prior to October 1, 1999 (the "O&M New Exposure"),
Motorola shall be paid cash compensation in an amount equal to (V)
multiplied by (W), where (V) equals the average daily O&M New Exposure
for the relevant payment period (with each component of O&M New Exposure
to be included in such calculation from the date it is first incurred)
multiplied by 0.0003288 (the daily equivalent of 12% interest per annum)
and (V) equals the number of days in the relevant payment period.
(3) For all New Exposure which exists at any time on or
after October 1, 1999 Motorola shall be compensated pursuant to Section
3(a).
Prior to October 1, 1999, all New Exposure for which Motorola is compensated
pursuant to this Section 3(f) shall not be considered Motorola Exposure for
purpose of determining whether the High Yield Equivalent Conditions of Section
3(e) exist and Motorola shall not be compensated for such New Exposure pursuant
to any other provisions of this Agreement; provided, however, that New Exposure
shall constitute Motorola Exposure in the case of all other provisions of this
Agreement and the MOU. For the avoidance of doubt, the parties acknowledge and
agree that Motorola Exposure from the Guarantee Increase and the Alternative
Guarantee shall be compensated pursuant to Section 3(a) and not as New Exposure
(with the entire amount thereof compensated as specified in Section 1(b) of the
MOU). Compensation pursuant to this Section 3(f) for each item of New Exposure
shall commence no later than the time that (but for this Section 3(f)) it would
first constitute Motorola Exposure.
(g) Guarantee Reduction. In connection with any permanent
reduction of the Commitments under the Bridge Agreement, the O&M Credit Facility
or any separate Credit Agreement (subject in the case of the Permanent Bank
Facility to Section 1(f) of the MOU), each of Iridium and Operating will use its
best efforts to cause the Lenders thereunder to amend the Bridge Agreement
Guarantee, O&M Guarantee or other relevant Guarantee, as the case may be, to
provide for a similar reduction in Motorola's maximum liability thereunder; and
neither Iridium nor Operating will voluntarily cause a permanent reduction in
the Commitments under the Bridge Agreement, the O&M Credit Facility or any
separate Credit Agreement (subject in the case of the Permanent Bank Facility to
Section 1(f) of the MOU), unless a similar reduction in Motorola's maximum
liability thereunder is effected no later than the time such permanent reduction
is effected.
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4. Representations and Warranties of Iridium and Operating.
Each of Iridium and Operating represents and warrants that:
(a) the representations and warranties of Iridium and
Operating set forth in Section 7 of the Bridge Agreement were true
and correct as of the date given under the Bridge Agreement and the
representations and warranties given under any subsequent Credit
Agreement will be true and correct on the date given;
(b) the Certificates of Designation relating to
Iridium's Series B Class 2 interests and Series C Class 2 Interests
have been duly adopted by Iridium's Banking and Financing Committee
in the form attached as Annex J to the Original Agreement Regarding
Guarantee and all other necessary corporate actions have been taken
to duly authorize the issuance to Motorola of the Series B Class 2
Interests and Series C Class 2 Interests; and
(c) the execution, delivery and performance of this
Agreement, the MOU, the Warrants, the Iridium warrants underlying
the IWCL Warrants, the amendments and the other agreements and
instruments contemplated hereby to which Iridium or Operating is a
party, have been duly authorized by Iridium or Operating (as the
case may be); each of this Agreement, the MOU, the Warrants, the
Iridium warrants underlying the IWCL Warrants, such amendments, such
waiver letter and the Certificates of Designation relating to
Iridium's Series B Class 2 Interests and Series C Class 2 Interests
and all other agreements contemplated hereby to which Iridium or
Operating is a party each constitutes, or, when issued or executed,
will constitute, a valid and binding obligation of Iridium or
Operating (as the case may be), enforceable in accordance with its
terms; the execution and delivery by Iridium and Operating of this
Agreement, the MOU, the Warrants, the Iridium warrants underlying
the IWCL Warrants, such amendments, such other agreements and
instruments contemplated hereby to which Iridium or Operating is a
party, the offering, sale and issuance of Iridium's Series B Class 2
Interests and the Warrants hereunder, the issuance of Iridium's
Class 1 interests upon exercise of Warrants and the fulfillment of
and compliance with the respective terms hereof and thereof by
Iridium and Operating, do not and shall not (i) conflict with or
result in a breach of the terms, conditions or provisions of, (ii)
constitute a default under, (iii), except as provided in the
security agreements related to the Permanent Bank Facility, result
in the creation of any lien, security interest, charge or
encumbrance upon Iridium's or Operating's or any Subsidiary's equity
capital or assets pursuant to, (iv) give any third party the right
to modify, terminate or accelerate any obligation under, (v) result
in a violation of, or (vi) require any authorization, consent,
approval, exemption or other action by or notice or declaration to,
or filing with, any lender, security holder, lessor, third party,
court or administrative or governmental body or agency by, or in
respect of, Iridium, Operating, any Subsidiary, IWCL or any of their
respective directors or shareholders pursuant to, the charter,
limited liability company agreement or
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<PAGE> 9
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bylaws of Iridium, Operating, any Subsidiary or IWCL (as the case
may be), or any law, statute, rule or regulation to which Iridium,
Operating, any Subsidiary or IWCL is subject, or any agreement,
instrument, order, judgment or decree to which Iridium, Operating,
any Subsidiary or IWCL is subject, except in the case of (vi) for
such authorizations, consents, approvals, exemptions, actions by,
notices to or filings with, parties (other than Iridium or
Operating) as would not be reasonably expected to have a material
adverse effect on the performance by Iridium and Operating of their
respective obligations hereunder.
5. Motorola Protection Rights. Either Operating or Iridium
(as the case may be) will provide Motorola with written notice at least five
full business days (and no more than ten business days) prior to giving notice
to the banks under any Credit Agreement or any proposed borrowing which is
covered by a Guarantee. In addition, for so long as any Guarantees remain
outstanding (unless the High Yield Equivalent Conditions exist), without the
prior written approval of Motorola (which may be withheld in the absolute
discretion of Motorola), Iridium shall not (in the case of (a), (b), (e), (f)
and (g) below) and Operating shall not (in the case of (c), (d), (e), (g) and
(h) below):
(a) sell, lease or otherwise dispose of, or permit any
Subsidiary to sell, lease or otherwise dispose of, more than 5% of
the consolidated assets of Iridium and its Subsidiaries (computed on
the basis of book value, determined in accordance with generally
accepted accounting principles consistently applied, or fair market
value, determined by Iridium's board of directors in its reasonable
good faith judgment) in any transaction or series of related
transactions or sell or permanently dispose of any of its or any
Subsidiary's Intellectual Property Rights (other than commercially
available software designed for operation on a personal computer or
network of personal computers);
(b) merger or consolidate with any Person or permit any
Subsidiary to merge or consolidate with any Person (other than a
Wholly-Owned Subsidiary);
(c) liquidate, dissolve or effect a recapitalization or
reorganization of its capital structure in any form of transaction;
(d) effect a change in its equity capitalization that
requires the approval of the holders of Shares;
(e) directly or indirectly declare or pay any dividends
or make any distributions upon any of its equity capital other than
distributions of Iridium to members made pursuant to Section 3.07(a)
of the LLC Agreement with respect to certain members' U.S. tax
liabilities;
(f) directly or indirectly redeem (other than a
redemption of the Series B or C Class 2 Interests of Iridium
pursuant to the LLC Agreement),
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purchase or otherwise acquire, or permit any Subsidiary to redeem,
purchase or otherwise acquire, any of Iridium's or any Subsidiary's
capital stock or other equity securities (including, without
limitation, warrants, options and other rights to acquire such
capital stock or other equity securities) other than pursuant to the
exercise of Iridium's remedies against any holder of Shares pursuant
to the terms of the LLC Agreement or the 1993 Stock Purchase
Agreement (as defined in the LLC Agreement);
(g) incur any indebtedness for borrowed money other than
indebtedness the amount, terms and conditions (including without
limitations, the subordination provisions) or which have been
approved in advance by the lenders to the extent required under any
Credit Agreement; or
(h) take any action or permit any circumstances to exist
which is prohibited under the terms of any Credit Agreement or fail
to take any action required to be taken by it under the terms of any
Credit Agreement, in each case subject to the grace period
applicable to any default created by such action or circumstance
pursuant to such Credit Agreement; provided, however, that this
clause (h) shall not apply to any action or circumstance that would
constitute a Motorola Default (as defined in the Bridge Agreement).
6. Amendments and Modifications to Credit Agreements.
Operating shall not enter into any amendment, waiver, supplement or modification
of any Credit Agreement (other than as contemplated by this Agreement or the
MOU) without the prior written consent of Motorola, which consent may be granted
or withheld by Motorola in its sole discretion, but acting in good faith.
7. Use of Proceeds. Except as otherwise contemplated by
this Agreement and the MOU, Operating will use the proceeds of the loans made
under any Credit Agreement solely (i) to make payments to Motorola at the times
and in the amounts required pursuant to the SSC, the TNDC or the O&M Contract,
(ii) to pay fees and expenses payable to the Lenders and agents in connection
with such Credit Agreement, (iii) to repay the loans under the Secured Credit
Agreement and (iv) for general corporate purposes so long as the amount subject
to this clause (iv) does not exceed the amounts budgeted for such purposes in
the budget plans approved by Iridium's board of directors from time to time;
provided, however, that Operating will not use such proceeds for the purposes
specified in clauses (ii), (iii) or (iv) if this Agreement or the MOU otherwise
restricts the use of such proceeds to any of the purposes specified in clause
(i).
8. Copies of Information and Notices. Any and all material
information, notices and correspondence provided by or on behalf of Operating to
any Lender (whether or not required under the applicable Credit Agreement) shall
be provided at the same time to Motorola.
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9. Referral of Matters to Related Party Contracts
Committee. Each of Iridium and Operating acknowledges and agrees that the
Contract Committee (as defined in the LLC Agreement) of Iridium's board of
directors has a limited scope of authority with respect to the relationship
between Motorola on the one hand and Iridium and Operating on the other hand,
and that only those matters specifically required by the LLC Agreement and
matters related to the other contracts between Motorola on the one hand and
Iridium or Operating on the other hand and actions or claims by Iridium or
Operating against Motorola and other Affiliate Transactions (as defined in the
Offering Memorandum) will be taken to the Contract Committee for approval.
10. Access. Iridium and Operating shall permit Motorola to
have access to relevant meetings, documents or other materials, other than
Internal Meetings, Documents and Materials (as defined below), directly relating
to the Guarantees or any Credit Agreement. "Internal Meetings, Documents and
Materials" means meetings between or among executives or employees of IWCL,
Operating or Iridium or between or among Iridium, Operating or IWCL and their
consultants, advisors and/or counsel; documents or other materials which are
prepared in connection with such meetings; and documents or other materials
which are circulated solely between or among executives or employees of Iridium,
Operating or IWCL or between or among Iridium, Operating or IWCL and their
consultants, advisors and/or counsel.
11. Notices under this Agreement. All notices, requests,
demands, claims, and other communications hereunder will be in writing. Any
notice, request, demand, claim or other communication hereunder shall be deemed
duly given (i) when delivered, if personally delivered, (ii) when receipt is
electronically confirmed, if faxed (with hard copy to follow via first class
mail, postage prepaid) or (iii) one day after deposit with a reputable overnight
courier, in each case addressed to the intended recipient as set forth below:
If to Iridium:
Iridium LLC
1575 Eye Street, NW
Washington, D.C. 20005
Attention: Vice President and Chief Financial Officer and
Vice President - General Counsel
Telecopy #: (202) 842-0006
If to Operating:
Iridium Operating LLC
1575 Eye Street, NW
Washington, D.C. 20005
Attention: Vice President and Chief Financial Officer and
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Vice President - General Counsel
Telecopy #: (202) 842-0006
If to Motorola:
Motorola, Inc.
1303 East Algonquin Road
Schaumburg, Illinois 60196
Attention: Senior Vice President - Corporate Finance
Telecopy #: (847) 538-9969
with a copy (which shall not constitute notice) to:
Motorola, Inc.
2501 S. Price Road
Chandler, AZ 85248
Attention: Vice President - Law Department, Iridium Matters
Telecopy #: (602) 732-3188
12. Definitions.
The following terms when used in this Agreement have the following meanings:
"Credit Agreement" means any agreement pursuant to which
Iridium or Operating incurs indebtedness for borrowed money which is
Guaranteed by Motorola, including, without limitation, the Bridge
Agreement, the O&M Credit Facility, the Permanent Bank Facility (as
defined in the MOU) to the extent guaranteed by Motorola, and any
substitute or replacement agreement which is Guaranteed by Motorola.
"Guarantee" means any guarantee by Motorola of any
obligations of Iridium or Operating under any Credit Agreement or
any note, agreement or other instrument executed in connection
therewith, including, without limitation, the guarantees set forth
in the Bridge Guarantee Agreement, the O&M Guarantee Agreement, the
Guarantee Increase, the Alternative Guarantee and any substitute or
replacement guarantee by Motorola.
"Guarantee Agreement" means any agreement which evidences any
Guarantee.
"Guarantee Payment" means any payment which is demanded
of Motorola by a Lender pursuant to any Guarantee which is actually
paid by Motorola, to the extent so paid.
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"Guaranteed Amount," with respect to any period, means
the maximum amount of Iridium's obligations for which Motorola has
provided a Guarantee during such period (regardless of the actual
amount of Iridium's obligations outstanding to any Lender during
such period) together, without duplication, with any Guarantee
Payments which have been made by Motorola but not repaid by Iridium.
"Interest Exchange Agreement" means the Interest
Exchange Agreement, dated as of June 9, 1997, by and between IWCL
and Iridium.
"IWCL" means Iridium World Communications Ltd.
"Lender" means any lender under any Credit Agreement, or
any agent or other authorized representative of any lender,
including without limitation the Global Arrangers (as defined in the
Bridge Agreement, as amended).
"LLC Agreement" means the limited liability company
Agreement of Iridium LLC dated as of July 19, 1996 as amended.
"Motorola-Based Default" means a default under the
Bridge Agreement or any other Credit Agreement which is caused
solely and directly by actions taken by Motorola other than a
default occurring as the result of the ownership percentage of
Motorola and its affiliates falling below the thresholds set forth
in the Bridge Agreement unless it falls below such thresholds as the
result of Motorola or an affiliate disposing of Iridium's voting
securities.
Also, a Motorola-Based Default means a default under the
Bridge Agreement or any other Credit Agreement which is caused
solely and directly by actions taken by Motorola as a result of a
demand for payment under a Guarantee which has arisen as a result of
a material default by Motorola under a material provision of the
TNDC, the O&M Contract or the MOU, so long as Iridium and Operating
have fully complied in all material respects with their respective
obligations under the SSC, the O&M Contract, this Agreement and the
MOU and Motorola's default is the primary cause for the default
under the applicable Credit Agreement which has caused such demand
for payment.
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"Motorola Exposure" means the Commitments under any
Credit Agreement to the extent such Commitments are subject to a
Guarantee, including, without limitation, the Commitments under the
Bridge Agreement, the Permanent Bank Facility and the O&M Credit
Facility to the extent they are subject to the Bridge Guarantee
Agreement (including any increase thereof and the Handset
Guarantee), the Alternative Guarantee and the O&M Guarantee, the
Guarantee Payments (to the extent not repaid by Iridium or
Operating), the outstanding amount of the O&M Deferrals and the
Vendor Financing Amount; provided, however, that with respect to the
Guarantee Increase and the Alternative Guarantee, if Operating
incurs any obligations under a Credit Agreement that are guaranteed
by the Guarantee Increase (or any part thereof or the Alternative
Guarantee), the entire amount of the Guarantee Increase (including,
without duplication, the Alternative Guarantee, if available) that
is, or could be, made available under the MOU shall constitute
Motorola Exposure regardless of whether Operating has arranged for
commitments from lenders or incurred obligations that are subject to
such amount.
"O&M Contract" means the Operations and Maintenance
Contract effective July 29, 1993 between Iridium and Motorola, as
amended from time to time.
"O&M Credit Facility" has the meaning ascribed thereto in the
MOU.
"Offering Memorandum" means the Offering Memorandum
dated October 9, 1997 related to the issuance and sale by Iridium of
its 11.25% Senior Notes due 2005, Series C.
"Person" means an individual, a partnership, a
corporation, a limited liability company, an association, a joint
stock company, a trust, a joint venture, an unincorporated
organization and a governmental entity or any department, agency or
political subdivision thereof.
"Senior Notes" has the definition set forth in the MOU.
"SSC" means the Space System Contract effective July 29, 1993
between Iridium and Motorola, as amended from time to time.
"Subsidiary" means, with respect to any Person, any
corporation, limited liability company, partnership, association or
other business entity of which (i) if a corporation, a majority of
the total voting power of shares of stock entitled (without regard
to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or more of
the other Subsidiaries of that Person or a combination thereof, or
(ii) if a limited liability company, partnership,
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association or other business entity, a majority of the partnership
or other similar ownership interest thereof is at the time owned or
controlled, directly or indirectly, by any Person or one or more
Subsidiaries of that Person or a combination thereof. For purposes
hereof, a Person or Persons shall be deemed to have a majority
ownership interest in a limited liability company, partnership,
association or other business entity if such Person or Persons shall
be allocated a majority of limited liability company, partnership,
association or other business entity gains or losses or shall be or
control any managing director or general partner of such limited
liability company, partnership, association or other business
entity.
"TNDC" means the Terrestrial Network Development
Contract effective January 1, 1993 between Iridium and Motorola, as
amended from time to time.
"Vendor Financing Amount" means the total amount
(including interest and expenses) of any vendor financing, including
without limitation (i) vendor financing contemplated by any
amendment to the TNDC or any other payment deferrals made available
to Iridium or Operating by Motorola and (ii) payment deferrals or
other financings from third party vendors made available to Iridium
or Operating as a result of Motorola providing credit support for
such deferrals or other financings. "Vendor Financing Amount",
however, does not include any payment being deferred pursuant to
Section 8 of the MOU for up to twelve months after completion of an
applicable TNDC milestone, so long as such payment and all accrued
and unpaid interest are paid in full by the end of such twelve month
period.
13. Complete Agreement. This Agreement and the other
agreements and instruments referred to herein embody the complete agreement and
understanding among the parties with respect to the matters addressed herein and
supersede and preempt the Second Amended and Restated Agreement Regarding
Guarantee and any prior understandings, agreements or representations by or
among the parties, written or oral, which may have related to the subject matter
hereof in any way.
14. Miscellaneous. This Agreement (a) is made under and
shall be governed by the laws of the State of New York without regard to
principles of conflict of laws, (b) is intended for the benefit of the parties
hereto and is not intended to benefit any other person and no person other than
the parties hereto may rely upon the provisions hereof, (c) may be executed in
counterparts, each of which taken together shall constitute one and the same
instrument, and (d) may be amended or waived only if such amendment or waiver is
in writing and signed by the party against whom it is sought to be enforced.
15. Limited Rights Against Motorola. The parties hereto
agree that Iridium and Operating shall have no rights (apart from those set
forth in this Agreement, the MOU or any other written agreements between such
parties) against Motorola as a
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result of Iridium's or Operating's inability to meet drawing or other conditions
under the Bridge Agreement or any other Credit Agreement.
* * * *
IN WITNESS WHEREOF, the parties have entered into this
Third Amended and Restated Agreement Regarding Guarantee in each case as of the
date first above written.
IRIDIUM LLC
By:
----------------------------
Name:
Title:
IRIDIUM OPERATING LLC
By:
----------------------------
Name:
Title:
MOTOROLA, INC.
By:
----------------------------
Name:
Title:
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